Definition: A correction in forex trading refers to a short-term reversal in the price movement of a currency pair, typically following a significant upward or downward trend. Corrections are generally seen as normal and healthy adjustments within a broader trend, where the price temporarily moves against the prevailing trend before continuing in the original direction.
Understanding and identifying corrections is essential for traders to make informed decisions, manage risk, and capitalize on temporary price movements within a broader trend.
Back to Glossary