What's a Forex Retracement? - Forex Retracement on Upward and Downward Trend

What's Retracement in Forex? - What's Price Retracement in Forex?

The price of a forex currency pair 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 trend then it retraces before resuming the trend direction - in a downward trend the price moves downward in trend direction and then retraces before resuming the trend direction.

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

Example of Zigzag Price Movement:

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

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

What is Retracement? - What is Forex Retracement? - Forex Price Retracement Explained with Example

What's Retracement Trading in Forex?

1-2: Price Moves Up - Forex Trend Direction

2-3: Price Retracement

3-4: Price Moves Up - Forex Trend Direction

4-5: Price Retracement

5-6: Price Moves Up - Forex Trend Direction

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