What is difference between reversal and retracement?

What is difference between reversal and retracement?

Reversal aur retracement dono technical analysis concepts hain jo price trends ke movement ko describe karte hain, lekin in dono mein kuch significant differences hain. Main aapko dono ka concept aur unke beech ke mukhtalif farqat batata hoon:**1. Reversal (Trend Reversal):** - **Definition:** Reversal ek situation hoti hai jab ek prevailing trend yaani ki uptrend (bullish trend) ya downtrend (bearish trend) khatam ho jata hai aur opposite direction mein naya trend shuru hota hai. Yani agar market uptrend mein hai, to reversal se market downtrend mein ja sakti hai, aur vice versa. - **Characteristics:** Reversal typically ek trend ke ant mein ya near the end mein hota hai. Isme price movement ka direction badal jata hai. - **Trading Strategy:** Traders and investors reversal patterns ka use karte hain to identify potential trend changes. Examples of reversal patterns include Head and Shoulders, Double Tops, Double Bottoms, etc. **2. Retracement (Price Correction):** - **Definition:** Retracement ek temporary reversal hoti hai, jisme prevailing trend ke opposite direction mein price ka temporary pullback hota hai, lekin overall trend wahi rehta hai. Yani, agar uptrend hai, to retracement mein temporary downtrend hoti hai, lekin phir se uptrend shuru hota hai- **Characteristics:** Retracement typically trend ke beech mein hoti hai aur overall trend ko confirm karti hai. - **Trading Strategy:** Retracement ko traders use karte hain to enter existing trends at better prices. Fibonacci retracement levels, moving averages, aur support/resistance levels retracement analysis mein use hote hain. **Mukhtalifiatein:** - Reversal, existing trend ko puri tarah se change kar deta hai, jabki retracement, existing trend ke temporary reversal ko indicate karta hai.- Reversal patterns ko often trend reversal indicators ke taur par dekha jata hai, jabki retracement levels trend continuation indicators hote hain.- Reversal patterns mein price direction change hoti hai, jabki retracement mein temporary pullback hota hai, lekin overall trend wahi rehta hai.In dono concepts ka samajhna traders ke liye ahem hota hai, kyun ki ye unhe market ke future price movements ko predict karne mein madadgar hote hain. Reversal patterns se trend reversal ka pata lagaya ja sakta hai, jabki retracement levels se existing trend ke pullbacks ko identify kiya ja sakta hai, jisse traders better entry aur exit points chun sakte hain.