How Do I Interpret a Forex Retracement on Upward Trend and Downwards Forex Trend?

How Do You Trade a Forex Retracement on Upward Trend and Downwards Trend?

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

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

Forex Trading Example of Zigzag Price Movement:

The forex trading example below shows forex price moving up in a zigzag pattern showing forex price trend and forex price retracement.

The forex trading example below shows movement in an upward market and forex price retracement.

What is Retracement?

What's Retracement Trading in Forex?

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

2-3: Forex Price Retracement

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

4-5: Forex Price Retracement

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

The retracement of forex price is described on the above forex trading example - this represents a forex price retracement in an upward forex trend.

How Do I Interpret a Forex Retracement on Upward Trend and Downwards Trend?