eXcentral - How Can You Tell the Difference between a Retracement and a Reversal?

The knowledge to predict the difference between a retracement and a reversal is a great tool to add to your trading arsenal. Many experienced traders are still unable to detect the difference between an assets retracement and a potential reversal. Reversals are temporary changes in a trend that occurs over a short period. In contrast, retracements are momentary changes that often occur during a more prolonged movement.  Unlike reversals, retracements show a continuation of an opposing trend within the targeted price action. Successfully determining whether an asset is displaying a reversal or retracement is vital if you want a high success rate trading portfolio.


JOHN ROMAN

John is an active trader and educator at Investors Trading Academy with an MBA in Finance from New York University.  He began trading in 1995, focusing mainly on commodities and options, then transformed into forex investment. His current specialization covers forex trading utilizing fundamental and technical analysis, namely chart pattern analysis. Mr. Roman has conducted training seminars all over the world, from novice to innovative strategies.  He provides a solid, collaborative, and highly encouraging training atmosphere to assist Forex traders in locating and trading momentum moves, using confirmed patterns and methods.