What is a Retracement?

What is Retracement in Oil Trading?

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

What is a retracement? A crude oil price retracement is a pull-back of the crude oil price before the crude oil market resumes the original oil trend movement.

Example of Zigzag Oil Trading Price Movement: The example explained below shows crude oil price moving up in a zigzag pattern showing crude oil price oil trend and crude oil price retracement.

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

What is a Retracement? - What is a Oil Trading Retracement? - Oil Trading Price Retracement Explained With Example

What is Retracement Trading in Oil Trading?

1-2: Oil Trading Price Moves Up - Oil Trading Trend Direction

2-3: Oil Trading Price Retracement

3-4: Oil Trading Price Moves Up - Oil Trading Trend Direction

4-5: Oil Trading Price Retracement

5-6: Oil Trading Price Moves Up - Oil Trading Trend Direction

The retracement of crude oil price is explained on the above example - this represents a oil retracement in an upwards crude oil trend.