Friday, December 22, 2017

Retracement or Reversal: Know the Difference

Most of us have wondered whether a decline in the price of a stock we're holding is long term or a mere market hiccup. Some of us have sold our stock in such a situation, only to see it rise to new highs just days later. This is a frustrating and all too common scenario, but it can be avoided if you know how to identify and trade retracements properly.

Retracements are temporary price reversals that take place within a larger trend. The key here is that these price reversals are temporary, and do not indicate a change in the larger trend.

Read more at
:
https://www.investopedia.com/articles/trading/06/retracements.asp 

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