What's a pullback?

<p id="isPasted">In forex trading, a pullback is a temporary pause or reversal in the price of a currency pair within the context of its current trend. It's considered a correction rather than a complete change in direction.</p><p>Here's a breakdown:</p><ul><li><p>Pullback vs. Reversal:&nbsp;A pullback is a&nbsp;small, temporary dip&nbsp;in the opposite direction of the prevailing trend,&nbsp;while a&nbsp;reversal&nbsp;is a&nbsp;more significant and long-term change&nbsp;in the price movement direction.</p></li><li><p>Pullbacks during uptrends:&nbsp;In an uptrend,&nbsp;a pullback occurs when the price of a currency pair&nbsp;retraces a portion of its recent gains.&nbsp;This doesn't necessarily mean the trend is over but rather represents a&nbsp;healthy consolidation&nbsp;before the price continues its upward trajectory.</p></li><li><p>Pullbacks during downtrends:&nbsp;During a downtrend,&nbsp;a pullback is a&nbsp;temporary rise in the price,&nbsp;which represents a&nbsp;temporary pause in the downtrend&nbsp;before the price resumes its downward movement.</p></li></ul><p>Here are some important points to remember about pullbacks:</p><ul><li><p>They are normal:&nbsp;Pullbacks are a natural part of any market trend and shouldn't be panicked over.</p></li><li><p>They can offer trading opportunities:&nbsp;Pullbacks can provide opportunities to&nbsp;enter a trend at a lower price&nbsp;(during an uptrend) or&nbsp;exit a trend at a higher price&nbsp;(during a downtrend).</p></li><li><p>Identifying pullbacks: There are various technical indicators and chart patterns that traders use to identify pullbacks, such as Fibonacci retracements, support and resistance levels, and candlestick patterns.</p></li></ul>