The idea that markets always crash in October stems from a few infamous historical events, but the belief itself is a myth. While October has witnessed some of the most dramatic market declines—like the 1929 crash and 1987’s Black Monday—the truth is that October is not inherently a crash month, and it doesn’t consistently produce negative returns.

Let’s separate the facts from the fear and examine why this myth persists—and what traders should focus on instead.

Why October Has a Bad Reputation

Several major market crashes occurred in October:

• 1929: The Great Depression began with a brutal sell-off in late October
• 1987: Black Monday saw the Dow drop 22% in a single day
• 2008: Lehman fallout and financial panic continued through October

These events create a strong psychological association between October and crisis, fuelling media headlines and market anxiety.

But the Data Tells a Different Story

Despite the history of famous crashes:

• October has delivered positive monthly returns more than half the time in major indices like the S&P 500
• Since 1950, October has often served as a turning point, where bearish trends reverse into year-end rallies
• The average return for October is comparable to or better than several other months, depending on the index

So no, markets don’t always crash in October—and in many years, they rally.

Why the Myth Persists

• Recency bias and memorable events leave emotional imprints
• Financial media often recycles “October crash” narratives for clicks
• Traders may unconsciously become more risk-averse in October, reinforcing choppy behaviour

But perception does not equal statistical truth.

How Traders Should Approach October

Rather than fearing the calendar, smart traders:

• Watch volatility: October often brings higher volatility, which can create both risk and opportunity
• Stay objective: Focus on price action and fundamentals—not seasonal fear
• Review macro conditions: Are there real catalysts for market stress? Or is it just historical anxiety?
• Prepare, don’t panic: Use proper position sizing and risk controls, regardless of the month

October is a time for awareness—not automatic alarm.

Conclusion: October Has Seen Crashes—But It’s Not a Crash Month by Default

Markets do not always crash in October. While history shows that it can be volatile, it’s not cursed or consistently bearish. Use data, not fear, to shape your trades.

To learn how to build a trading strategy that thrives through all market cycles—crashes included—explore our Trading Courses designed to help traders stay clear, calm, and consistently in control.