What is a Retracement?

What is Retracement in Commodities?

The commodities price of a commodity instrument does not move up or down in a straight line. Instead the commodities price moves up or down in a zigzag pattern called a commodity trend - in this pattern the commodities price moves upward in a commodity trend then it retraces before resuming the commodity trend direction - in a downward commodity trend the commodities price moves downward in the commodity trend direction and then retraces before resuming the commodity trend direction.

What is a retracement? A commodities price retracement is a pullback of the commodities price before the commodity market resumes the original commodity trend movement.

Example of Zigzag Commodities Price Movement: The example illustrated and explained below shows commodities price moving up in a zigzag pattern showing commodities price commodity trend and commodities price retracement.

The example illustrated and explained below shows movement in an upward market and commodities price retracement.

What is a Retracement? - What is a Commodities Retracement? - Commodities Price Retracement Explained With Example

What is Retracement Trading in Commodities?

1-2: Commodities Price Moves Up - Commodities Trend Direction

2-3: Commodities Price Retracement

3-4: Commodities Price Moves Up - Commodities Trend Direction

4-5: Commodities Price Retracement

5-6: Commodities Price Moves Up - Commodities Trend Direction

The retracement of commodities price is explained on the above example - this represents a commodity retracement in an upward commodities trend.