Why retracement? | Forex Factory

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Why retracement?

  • #1
  • First Post: Dec 27, 2009 6:47am Dec 27, 2009 6:47am
I am trying to gain better understanding of price action, and i have many questions about retracements.

Anybody who could point out the reasons for price retracments? (i know it consists of profit taking and ppl going short, but i am more intrested in the degree of it and by whom the action is taken, e.g. Central banks? Retail traders like us??)

Also, has anyone done any research or seen any reports on the amount of retracement in relation to the force of a breakout to the orginal trend?

thx
Life is a school for the soul
  • #2
  • Dec 27, 2009 10:52am Dec 27, 2009 10:52am
Same answer for questions: Why Price moves? Anybody knows how far a price will go after it breakouts?
  • #3
  • Dec 27, 2009 12:34pm Dec 27, 2009 12:34pm
Quoting esuffw
I am trying to gain better understanding of price action, and i have many questions about retracements.

Anybody who could point out the reasons for price retracments? (i know it consists of profit taking and ppl going short, but i am more intrested in the degree of it and by whom the action is taken, e.g. Central banks? Retail traders like us??)

Also, has anyone done any research or seen any reports on the amount of retracement in relation to the force of a breakout to the orginal trend?

thx
Remember ,its not the price of only 1 currency ,its the price of two currencies that causes the price action of the pair. There are many things going outside the chart you are seeing.
  • #4
  • Last Post: Jan 5, 2010 8:03pm Jan 5, 2010 8:03pm
Quoting Brb-Fraudin
Remember ,its not the price of only 1 currency ,its the price of two currencies that causes the price action of the pair. There are many things going outside the chart you are seeing.
Thx for the reply Fraudin. Do you have any suggestions on apply all the other forces outside the charts to determine price action? Any good books to read to get better insights?
Life is a school for the soul
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