A bear market occurs when prices have fallen in value by more than 20% from recent highs, during a period of negative market sentiment.
The financial markets naturally grow and contract due to changes in supply and demand. This constant change is caused by fundamental economic factors influencing the natural buy and sell cycle of an economy. This gives rise to bull and bear markets. A full-on bear market shouldn't be confused with shorter-term corrections of a bull market. It's almost impossible to predict when a bear market will occur, or how long it will last for. It is equally as difficult predicting the end of a bear market and this makes trading these markets especially tricky.
The most recent bear market was during the global financial crisis, when the Dow Jones Industrial Average fell 54% from October 2007 to March 2009. This bear market crash offered astute traders numerous opportunities to short sell the global index markets and individual securities.
When prices start to rise in a bear market, usually after a downtrend, this can lead to bull traps.