Investopedia

Technical Correction

Filed Under »
Dictionary Says

Definition of 'Technical Correction'

A decrease in the market price of an asset or entire market after extensive price increases. A technical correction occurs even when there is no evidence that the increasing price trend should cease. It is often caused when investors temporarily slow down their purchases of securities, which commonly leads to a pullback toward a short-term support level.
Investopedia Says

Investopedia explains 'Technical Correction'

A technical correction is a drop in stock or market prices when there is no fundamental reason for a decrease. After a steady increase in value, investors may become more cautious buyers at the higher prices and look to reevaluate the market, resulting in a decrease in purchases. The drop in purchase volume will stop the upward price trend from continuing while the market re-evaluates the short-term direction.

Articles Of Interest

  1. A Look At Primary And Secondary Markets

    Knowing how the primary and secondary markets work is key to understanding how stocks trade.
  2. Getting To Know The Stock Exchanges

    Here are the answers to all the questions you have about stock exchanges but are too afraid to ask!
  3. The Stock Market: A Look Back

    The past century was marked by furious economic change. What can it tell us about what lies ahead?
  4. Stock Basics Tutorial

    If you're new to the stock market and want the basics, this is the tutorial for you!
  5. Women And Investing: It's A Style Thing

    You don't have to be a boy or act like a boy to win. In fact, doing the opposite could be better for your financial health.
  6. Build A Model Portfolio With Style Investing

    This sophisticated approach will add flair to your returns.
  7. How To Develop A Trading Brain

    The fundamental role of trader psychology tends to be underestimated, with too much emphasis placed on the technical side.
  8. Tips For Controlling Investment Losses

    A profit/loss plan helps investors recognize mistakes and invest logically, rather than emotionally.
  9. This Is Your Brain On Stocks

    Find out how the human mind can hurt investors' portfolios.
  10. Investors: Rely On Your Gut

    Find out how your personality and natural instincts can direct your investment choices.
comments powered by Disqus
Marketplace
Hot Definitions
  1. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.
  2. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
  3. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.
  4. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
  5. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.
  6. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
Trading Center