What's a Indices Retracement?

What's Retracement in Indices Trading?

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

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

Example of Zigzag Indices Price Movement: The example explained and illustrated below shows stock indices price moving up in a zigzag pattern showing stock indices price trend and stock indices price retracement.

The example explained and illustrated below shows movement in an upward market and stock indices price retracement.

What is a Retracement? - What's Indices Retracement? - Indices Price Retracement Explained with Example

What's Retracement Trading in Stock Indices Trading?

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

2-3: Indices Price Retracement

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

4-5: Indices Price Retracement

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

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