What is the market crash?

market is a sharp drop in prices on the stock market for a very short time. Although the level of decline and time is non -specific, there is usually an accident on the market when there is a double -digit drop in stock prices for hours or days. The stock market accidents are driven by poor market conditions and panic of consumers. The most famous accident on the stock market was in the US in 1929 and it began with great depression. Inflated stock prices and consumer panic usually contribute to these conditions. Inflated stock prices are when the ratios of profits and earnings exceed the long -term average of the shares, so the stock does not necessarily pay the amount they traded.

As soon as the buyer on the stock market has become a stock market sellers, there may be a comprehensive psychological spiral and people can panic. After this happens, more and more people are starting to sell their shares and the chain reaction is beginning to take place. Panic leads to more panic and other sale. Stock market accident does not have to represent EKOnomic conditions at a moment; Instead, it could only be driven by psychological factors.

There are two euphemisms that describe the stock market at the moment: the bear market and the bull market. The bear market occurs when stock prices fall and remain low for a long time, such as months or years. The bull market occurs when stock prices are rising and remain high for a long time. Usually a prolonged bear market after a market crash.

There are relatively few market accidents in the history of the stock market. Probably the largest market crash began in the US in 1929, after the success of the 20 years. The Dow Jones industrial average, composed of some of the best available stocks, threw 23% of the days known as Black Thursday, October 24th and Black Tuesday, October 29. This accident led to great depression and Dow Jones from 1929 to 1932 fell by 89% of its value.

Many countries have introduced rules that stopBack when there is a large decrease in the value of the shares. This helps to prevent large crowds controlled panic in the campaign of their money from the market when it is most susceptible to the accident. These rules are known as circuit breakers or trading with curbs.