A Retracement describes price action when a trending market retraces part of its gains before continuing in the same direction.

This is a temporary pause or decline in the overall trend of the asset.

This term is sometimes used interchangeably with "Retracement".

A pullback is a short-term move that goes against the long-term trend and can provide an opportunity to join an uptrend at a relatively favorable price.

Trend Retracements

A pullback tells you that the overall market trend has been temporarily paused.

This could be attributed to a number of factors, including a temporary loss of trader confidence following the release of certain news or economic data.


retracement should not be confused with the reversal , which is a more sustained move that goes against the current trend.

You need to determine if the price drop is a pullback and not a complete trend reversal.

The most significant difference between a pullback and a reversal is that a pullback is temporary, while a reversal is a more permanent change in the overall trend direction.

Pullbacks typically last several trading days, while reversals can mean a complete change in market sentiment.

Multiple indicators, including moving averages and pivot points, can help you determine whether a pullback is actually a reversal.

These technical indicators highlight support levels. If a pullback breaks this support, a reversal is likely.

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