Bear market

A bear market signifies a general downturn in asset prices, often reflecting negative investor sentiment and economic contraction. It is not just a temporary dip but a prolonged trend where supply exceeds demand, pushing prices consistently lower. This environment can affect various markets, including stocks, commodities, and currency pairs, over weeks or months, sometimes longer.

For a retail trader, a bear market presents both risks and opportunities. Holding long positions during such a period can lead to significant drawdown and capital loss if not managed with stop-loss orders. Conversely, traders can profit by taking short positions, speculating on further price declines. Effective risk management and adapting strategies to a downward trend are crucial.