retracement

Retracement is a term used across multiple disciplines to describe a return to a previous position or state after a departure. In general, a retracement implies a temporary reversal or backtracking within a larger movement or framework, rather than a definitive reversal of the underlying trend or condition. The word derives from retrace, meaning to go back over previously traced territory.

In financial markets, a price retracement refers to a temporary reversal against the prevailing trend. For example, in an uptrend a pullback occurs when prices fall briefly before resuming the rise. Retracements are typically measured as a percentage of a prior move, and common reference levels come from Fibonacci ratios such as 38.2%, 50%, and 61.8%. Traders use these levels, along with support and resistance and trendlines, to identify potential entry points and manage risk. It is important to distinguish retracement from a trend reversal; a retracement is expected to continue the dominant trend, whereas a reversal signals a change in direction.

In surveying and land administration, a retracement survey re-establishes the exact position of legitimate monuments or boundary corners that were originally established by an earlier survey. The process may involve field measurements, records comparison, and re-marking of corners to confirm or restore the original boundaries, often to resolve disputes or confirm title.

In electronics and display technology, the term retrace or retracement is used to describe the time when an electron beam returns to the beginning of the next raster line or frame in raster-scan displays. While related in concept, retrace in this context is not usually referred to as retracement in the same sense as price retracements.

See also: pullback, reversal, Fibonacci retracement, boundary survey, retrace.