Retrace then extend

Why a break against your bias on a smaller chart is usually the pullback you were waiting for, and the order the retracement tools are used in.

Inside a trend, price does two different things. Knowing which one you are looking at is what makes a bias usable.

The two legs

A trend travels to a new high, then pulls back, then travels again.

The leg to the new high is the extension, meaning the move that carries the trend forward. The pullback inside it is the retracement, which you already know from module 26.

Every trend is extensions with retracements between them.

The pullback is the setup

In a daily uptrend, a 4 hour break of structure to the downside is not the trend turning. It is the pullback starting.

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