How Do I Analyze a Retracement on Up-ward Trend & Downwards Trend?
Indices Trade a Retracement on Up-ward Trend & Downwards Trend
The price of a instrument doesn't move upward or downwards in a straight line. Instead the price moves up or down in a zigzag pattern setup called a trend - in this pattern the price moves up-ward in a trend then it pulls back before it resumes the trend direction - in a downward trend the price moves downward in trend direction & then retraces before resuming the trend direction.
What's retracement? A stock price retracement is a pull-back of price before the market resumes original trend movement.
Indices Example of Zigzag Price Movement: The trading example explained and illustrated below shows price moving up in a zig zag pattern setup showing price trend & stock price pull back.
The trading example explained and illustrated below shows movement in an upward market and stock price pullback.
What's Retracement? - What's a Retracement? - Price Retracement Explained with Trading Example
What is Retracement Trading in Indices Trading?
1-2: Price Moves Up - Trend Direction
2-3: Price Retracement
3-4: Price Moves Up - Trend Direction
4-5: Price Retracement
5-6: Price Moves Up - Trend Direction
The pull back of price is illustrated on the above example - this represents a price retracement in an upward stock trend.
How Do You Interpret Retracement on Up-ward Trend & Downwards Trend
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