Identify Retracement and Reversal


In Every Up move/Down move there will be Retracement. Retracement may a consolidation or it may be a correction.
Read below Article to understand Correction and Consolidation


Sometimes there may be a complete reversal after a move. Identifying whether it is just a retracement or it is a complete reversal help us in trading. Here are some differance and features ot retracement and reversal to identify Whether it is a retracement or a pullback

Retracement
 1. In Retracement (in uptrend), Price move to downward very slowly or it have only little trendline slope for price movement.

 2. Traders or investers use Every dip is a buying opportunity. ie. high buying interest. that why it has low trendline slope.

 3. May not have a perticular chart pattern
Reversal
1. In Reversal (in uptrend), There may be a sharp price  movement to downwards with high trendline slope.

2. Professional traders and institutional traders book theire profit.ie. Very little buying interest. Every rally (Higher High Lower Low) is a selling opprotunity.

3. Most of the time reversal happen (or Uptrend End) with chart pattern line Double Top, Head and Shoulders, Swing low, 1 2 3... etc


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