## Price Movements That Confuse You? Pullback and Throwback Are Things You Need to Know

When you see the price moving along a trend and suddenly reverse, many calm traders fear a trend reversal. The result is that the price resumes its original direction. This is a common occurrence and is called **Pullback and Throwback**, which are price patterns that, if used correctly, can become golden opportunities for entering at good prices.

## What Is the Key Difference Between Pullback and Throwback?

Many people may be confused whether Pullback and Throwback are the same. In fact, both are based on the same principle: the price pauses from the main trend briefly to reset before continuing. But the difference lies in **the direction of the primary trend**.

**Pullback** occurs in a (Downtrend). It’s when the price bounces up slightly but does not break through the significant resistance, then drops to create a new lower low (Lower Low).

**Throwback** occurs in an (Uptrend). It’s when the price pulls back a bit but does not break the key support, then moves back up to create a new higher high (Higher High).

The cause is quite simple: as the price continues moving in one direction, existing holders start locking in some profits, creating pressure that causes the price to adjust. However, because the underlying buying/selling momentum still exists, the price returns to its original trend after the correction is sufficient.

## Why Are Pullback and Throwback Different from Reversal (Reversal)?

This is a crucial point that often causes beginner traders to lose money. The basic structure of Pullback/Throwback may look like a Reversal, but what follows is entirely opposite.

The first thing to observe is **touching support/resistance**. Generally, Pullback and Throwback do not break the existing support/resistance levels. In contrast, Reversal often breaks through these levels, especially if it breaks a strong support or resistance, indicating a likely Reversal.

Another important signal is **trading volume (Volume)**. Pullbacks and Throwbacks occur with low volume, making the correction seem temporary. Reversals, on the other hand, usually involve high volume, confirming a genuine change in trend.

## How to Use Pullback and Throwback for Serious Trading

### Strategy 1: Trade on Breakout Points

When the price breaks a clear support/resistance, a Pullback or Throwback often occurs to test the old level. Traders should wait for the price to retest that level, then enter in the direction of the main trend.

For example, if the price breaks above resistance and then pulls back to test it, don’t rush to buy immediately. Wait until it touches the original resistance and bounces back up. That’s the best risk/reward point.

### Strategy 2: Use as a Ladder

In a clear trend, you’ll see the price moving in a stair-step pattern. In an uptrend, it will keep making higher lows (Higher Low) and higher highs (Higher High). At these Higher Low points, you can find support to wait for a Throwback and then buy.

In a downtrend, the opposite applies: the price makes lower highs (Lower High). At these points, find resistance and wait for a Pullback to enter short.

### Strategy 3: Use Trendlines or Moving Averages

In an uptrend, trendlines act as support. When the price throws back and touches the trendline, you buy. In a downtrend, trendlines act as resistance. When the price pulls back and touches the trendline, you sell.

If you prefer using Moving Averages, you can apply the same logic.

### Strategy 4: Use Fibonacci to Find Targets

When a Throwback occurs in an uptrend, the price usually retraces no more than 38.2% or 50% of the previous move. In a downtrend, a Pullback typically also does not exceed 38.2% or 50%.

You can set partial profit levels at 23.6%, 38.2%, 50%, and place Stop Losses just beyond these levels. These figures may need adjustment depending on the asset’s characteristics.

## Important Reminders

Not every Pullback and Throwback will succeed. Sometimes, a Pullback can turn into a Reversal midway. Therefore, proper risk management (Stop Loss) is as important as understanding Pullback and Throwback.

Additionally, the stronger the original trend, the more reliable the Pullback and Throwback signals. When combined with other tools like Volume, Support/Resistance, Fibonacci, their accuracy increases further.