Countermove

Countermoves refer to a movement in a security’s price counter to its current trend. It is usually sizable enough to be noticable(i.e. a stock rising 50% and falling 2% can hardly be considered a countermove.) This can occur for a number of reasons and may simply be an inrelevant fluctuation. It is also known as a retracement.

Countermoves are against the prevailing trend, and therefore trading on them may be dangerous, as it is unwise to bet against the trend. Additionally, it may be difficult to tell a countermove from a reversal, what started as a countermove could turn into a reversal.

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