A retracement is a temporary price movement in the opposite direction to a trend. It is largely synonymous with the term correction.

    In a retracement, the overall trend continues to move in its original direction, but experiences such corrections from time to time.

    Compared to a reversal, retracements are only temporary and usually occur after a large price movement. There are many ways to identify retracements: trend linessupport and resistance, or Fibonacci levels.