What is a Indices Retracement?

What is Retracement in Indices Trading?

The stock indices price does not move up or down in a straight line. Instead the stock indices price moves up or down in a zigzag pattern called a indices trend - in this pattern the stock indices price moves upward in a indices trend then it retraces before resuming the indices trend direction - in a downward indices trend the stock indices price moves downward in the indices trend direction and then retraces before resuming the indices trend direction.

What is a retracement? A stock indices price retracement is a pullback of the stock indices price before the stock indices trading market resumes the original indices trend movement.

Example of Zigzag Indices Price Movement: The example explained and illustrated below shows stock indices price moving up in a zigzag pattern showing stock indices price indices trend and stock indices price retracement.

The example explained and illustrated below shows movement in an upward market and stock indices price retracement.

What is a Retracement? - What is a Indices Retracement? - Indices Price Retracement Explained with Example

What is Retracement Trading in Indices Trading?

1-2: Indices Price Moves Up - Indices Trend Direction

2-3: Indices Price Retracement

3-4: Indices Price Moves Up - Indices Trend Direction

4-5: Indices Price Retracement

5-6: Indices Price Moves Up - Indices Trend Direction

The retracement of stock indices price is explained on the above example - this represents a indices trading retracement in an upward stock indices trend.