What Is a Pullback?
A pullback is a temporary move against the trend before it resumes — a pause, not a turn. Pullbacks are where patient traders get their best entries, because you join the trend at a better price instead of chasing.
Why pullbacks happen
After a strong move, some traders take profit and price eases back before the trend continues. That dip often retraces into a logical zone — an order block, FVG, or Fibonacci level — where buyers (or sellers) step back in.
Pullback vs reversal
A pullback resumes the trend; a reversal flips it. The clue is structure: if the trend's higher highs and higher lows stay intact, it's likely a pullback. A change of character against the trend warns of a possible reversal instead.
How to trade a pullback
Wait for price to retrace into a logical level in the trend direction, look for a reaction (rejection, structure shift), and enter with a stop beyond the level, targeting the prior extreme. Patience beats chasing.
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What's the difference between a pullback and a reversal?
A pullback is a temporary pause that resumes the trend; a reversal flips the trend. Watch market structure: intact higher highs/lows suggest a pullback.
How deep is a normal pullback?
Often into the 38-62% retracement of the prior move, frequently landing at an order block or FVG. Deeper retracements that break structure may signal a reversal.
Educational content only, not financial advice. Trading futures carries substantial risk of loss.