Forex glossary
Pullback
A pullback is a move against an identified trend, considered a possible correction or return to a broken level. It has no fixed universal depth or duration. Subsequent price action and structural rules distinguish a temporary retracement from an emerging reversal; trend resumption is not guaranteed.
Illustrative example
How does it work in practice?
Assume EUR/USD rises from 1.0900 to 1.1000 then retreats to 1.0970. This is a thirty-pip pullback candidate; later swings determine whether the previously identified upward structure remains intact.
A case to work through
Level touched, condition unmet
Hypothetically, after breaking 100 price returns to 100; the plan requires a later close above 102.
- Touching 100 establishes a retest rather than the whole rule.
- A close of 101 remains below 102, so the reaction condition is unmet.
What follows? Keep the observation status dictated by the written rule.
Example boundary: A reaction condition cannot guarantee continuation and can delay assessment.
A useful distinction
Pullback / Retracement
Pullback describes a retracement in trend context; retracement can primarily quantify the portion of a selected move given back.
Check your understanding
Apply an additional reaction condition after a retest.
Show the answer and explanation
The retest, but not the required reaction condition
51 does not exceed 52.
From observations to price structure
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Related terms
Sources and documentation
- StockCharts – support and resistance
Reaction zones, break criteria and possible role reversal of levels.
Document read: - StockCharts – price channels
Highest-high/lowest-low windows and channel boundaries; breakout comparison needs a defined offset.
Document read:
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