Price movements against the direction of the current trend or following the end of a trend. The market "retraces its steps", often a percentage of the preceding move. Common retracements are 38, 50, and 62 percent. A rule of thumb is that a retracement of at least 33% is required just to allow the winners from the previous move to buy or sell back their positions.

Synonymous with the term correction; used to denote a temporary reversal in the overall trend of the market to accommodate for excessive acceleration or deceleration of asset price movement.