Retracement
Elliott Wave Theory glossary · Fibonacci Price & Time Projections
Definition
The counter-trend movement following an impulse wave, measured as a percentage of the impulse wave's range.
Retracement in plain English
A retracement is a temporary step backward: the market pushes hard in one direction, then partly reverses before continuing. Picture climbing stairs while a little kid keeps tugging you down a step or two, you're still heading up, just not in a straight line. We measure it as a percentage of the previous move, so if a stock climbs $10 and then slips back $4, that's a 40% retracement. Traders watch these because certain percentages, like around 38% or 62%, tend to show up again and again.
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