Correction (Market) Definition

A market correction is a short-term decline of roughly 10% or more from a recent high in an asset or index.

What is a Market Correction?

Corrections are considered a normal part of market cycles and are generally shorter and less severe than bear markets.

They can be triggered by profit-taking, changing economic data, or shifts in investor sentiment.

An index falling 12% from its recent peak before stabilizing would typically be described as a correction.

A candlestick chart is a price chart that displays the open, high, low, and close for a period using a body and wicks.

A capital gain is the profit realized when an asset is sold for more than its original purchase price.

Capitalization, or market capitalization, is the total market value of a company's outstanding shares.