Retracement
A partial price reversal within a larger trend, measured as a percentage of the preceding impulse move.
A retracement is a price correction against the trend that gives back a portion of the prior impulse leg. Unlike a reversal, it does not change the higher-degree trend — it is noise within a signal.
Traders measure retracements using Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%) to anticipate where the correction may find support or resistance and the trend may resume. The depth of a retracement relative to the impulse gives clues about trend strength: shallow (23.6–38.2%) retracements indicate strong momentum; deep (61.8%) ones suggest weakening conviction.
Related Terms
Confluence
The overlap of two or more independent technical signals at the same price level, strengthening the case for a trade.
IntermediateFibonacci Retracement
Horizontal levels derived from Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%, 78.6%) that highlight potential pullback support or resistance zones.
IntermediateMomentum
The rate of change of price — how fast and with what force price is moving in a given direction.
BeginnerPullback
A temporary counter-trend retracement within an ongoing trend, offering a lower-risk entry in the direction of the trend.
BeginnerTrend
The persistent directional bias of price over a defined timeframe — up, down, or sideways.
Beginner