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The retracement and the reversal level can reduce the number of negative trades and set up some positive trades.<\/p>\n
Retracement Level <\/strong><\/td>\n| Reversal Trend <\/strong><\/td>\n<\/tr>\n | \u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 It will occur after huge directional price movements.<\/p>\n | \u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 It will represent it for a short time.<\/p>\n \u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 It will do not change fundamental (Macroeconomics environment)<\/p>\n \u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 In Retracement uptrend the interest rate is present and the price to rally. In the downtrend, selling interest is present and it will make the price decline.<\/p>\n <\/td>\n \u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 It will occur at any time.<\/p>\n | \u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 It will show the long term price movement.<\/p>\n \u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 Do not Change the fundamentals which are a catalyst for long term reversal.<\/p>\n \u25cf\u00a0\u00a0\u00a0\u00a0\u00a0 In the reversal the uptrend is very little and buying interest is forcing the price to fall. In the downtrend, the very little movement of the selling interest forcing the price to rise further.<\/p>\n <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n [\/vc_column_text][vc_column_text el_class=”heading_text_area”]<\/p>\n Different Methods to Identify Retracements<\/strong><\/span><\/h5>\nThe Fibonacci level is also called the popular way to identify the retracement of the price movement. The price movement will be retracement over 61.8%, 50.0% 38.2% to the Fibonacci level retracement before going to the overall trend.<\/p>\n If the prices go beyond these levels, then it is an indication that reversal may happen. However it\u2019s not sure that reversal can happen but probability is more.<\/p>\n [\/vc_column_text][vc_column_text]Pivot Points<\/span><\/strong><\/p>\n Pivot Points is another way to see if the prices are staging in reversal.<\/p>\n In Downtrend traders will look at the resistance levels (R1, R2, R3) and wait for it to break.<\/p>\n In Uptrend traders will look at the support levels (S1, S2, S3) and wait for it to break.<\/p>\n |