What is a “market pullback” or “market correction”? Let’s explain it simply.

Suppose you are selling potatoes 🥔 in your city. Every day the price is normal, and business is going well.

One day someone spread a big rumor:

“There will be a French fry festival 🍟, where you can win prizes for making the best fries!”

Hearing this news, everyone rushed to buy potatoes. Due to the increased demand and low supply, the price of potatoes started to rise.

Market correction

Some greedy traders bought most of the potatoes, created an artificial shortage, and started selling them at a higher price. Let’s call them the “Potato Syndicate”. The price went up by 60%.

But after a few days, the government investigated and announced that there was enough supply of potatoes. People calmed down, and the price went down by 10%.

This is a market correction—when prices return to normal after an overreaction.

part 1.

Shohanur Rahman Shuvo