#MarketPullback Generally speaking, a pullback is each counter-trend move the market does, and more strictly said – each counter-trend bar which manages to break through the previous bars extreme (e.g. in a bearish trend a pullback bar is a bar, whose high extends above the previous ones high).

Due to their importance as entry initiators, pullbacks should be defined using a broader definition. We can assume that each pause in the current trend is a pullback, even if it leads only to two-sided trading, instead of a counter-trend move. As you know, market movement is rarely completely one-sided, which means that even the strongest trends have at least small pauses.

Pullbacks can be considered as small trends inside the larger trend, and within them there will also be even smaller pullbacks, which can be clearly seen on a smaller time frame. We said in the article “Two Attempts for a Shift in Market Movement” that the market is commonly trying to do something twice, and if it fails both times, it usually attempts to do the opposite. This also means that pullbacks tend to have two legs, or even more. In most cases, if the second move fails to reverse the trend, the market will do the opposite and resume its trend.