#MarketPullback
What is Market Pullback in Trading?
In the trading world, the term "Pullback" refers to a temporary decline in the price of an asset within an overall prevailing trend, whether it is upward or downward. The "pullback" or "retracement" does not signify the end of the main trend, but rather it is just a pause or a slight correction in price before it resumes its original movement.
Pullbacks typically occur as a result of profit-taking by traders who entered the trade early or due to short-term news events. These declines are viewed as excellent opportunities for traders who were unable to enter the main trend, as they allow them to buy at a better price in an upward trend or sell at a higher price in a downward trend.
Traders can identify pullbacks using technical analysis tools such as moving averages, support and resistance levels, and oscillators. The fundamental difference between a pullback and a reversal is that a pullback is temporary and the trend continues, while a reversal represents a permanent change in price direction.