Retracement
A partial price reversal within a larger trend, measured as a percentage of the preceding impulse move.
A retracement is a price correction against the trend that gives back a portion of the prior impulse leg. Unlike a reversal, it does not change the higher-degree trend — it is noise within a signal.
Traders measure retracements using Fibonacci ratios (23.6%, 38.2%, 50%, 61.8%) to anticipate where the correction may find support or resistance and the trend may resume. The depth of a retracement relative to the impulse gives clues about trend strength: shallow (23.6–38.2%) retracements indicate strong momentum; deep (61.8%) ones suggest weakening conviction.