Retracement


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Retracement

A price movement in the opposite direction of the previous trend.

Retracement

A situation in which a price begins to move back toward its former price after it has changed significantly in a brief period of time. An example of retracement occurs when a stock falls 10% but then recovers 8%.
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The adaptability of the Fibonacci retracement to a variety of charts and time frames has made the tool one of the most popular ones among forex traders.
So far there's only been one rally post breakout and a retracement that started last week.
The 50% retracement level is not really a Fibonacci ratio, but it is used because of the overwhelming tendency for an asset to continue in a certain direction once it completes a 50% retracement.
However, today, we will look at our favorite retracement level in the form of the 78.