Blog with retracement_trading

Price chart showing an uptrend from $25 to $50, pulling back to $37.50 at the 50% retracement level, then resuming higher

What Does Retracement Mean and How Do Retracements Work in Price Action?

You're watching a strong uptrend, then the price suddenly drops. Do you buy the dip, or is the trend over? It depends on whether this is a retracement or a reversal: get it wrong and the market turns against you; get it right and you enter at a better price. This guide covers what a retracement means, why it happens, and how traders use Fibonacci levels to find entries.

August 2530