Understanding the Difference Dip, Correction, Dump, and Pullback
In trading and investing, you’ll often hear these terms, but they each have distinct meanings:
Dip: A dip is a short-term drop in price during an overall uptrend. It’s usually mild and seen as a buying opportunity before the price moves higher again.
Correction: A correction is a larger price decline, typically 10% or more from a recent high. It signals a temporary pullback in the market but not a complete trend reversal.
Dump: A dump is a sudden and steep price drop, often driven by panic selling or negative news. It usually happens quickly and can cause significant losses in a short time.
Pullback: A pullback is a brief pause or slight decline in price within a continuing trend. It’s less severe than a correction and can be viewed as the market catching its breath before moving on.
Knowing these terms helps you better read market moves and make smarter decisions!
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