1Downtrend
The market falls, reaches a low, then bounces to form a high.
THE TRENDHorizontal Retracement
In a downtrend, price retraces up to the horizontal level that launched the last leg down. That old launch point is where sellers step back in.
- SELL SIGNAL
- As price nears the horizontal resistance
- BUY STOP
- Above the resistance line
- EARLY ALERTS
- 10% alert at a 90% retrace, 5% alert at 95%
- TREND
- A downtrend with a new low below the resistance
● PATTERN ANATOMY · MODEL
01 · ANATOMY
Three steps make the retracement
A continuation pattern: the trend is already down. Hover a card to light it up on the chart.
2Resistance
The high becomes a horizontal level: the launch point of the next leg down.
THE LAUNCH POINT3Retracement
After a new low, price retraces back up towards that resistance. The sell sits just below it.
THE ENTRY02 · FORMATION
Where the resistance comes from
Wait for at least two valid bounces and a clean structure before planning the entry.
The launch point
The resistance is the horizontal level that launched the last leg down, before the new low.
1clear level
Two early alerts
We measure the distance from the recent low back up to the resistance and alert you as price closes in.
90%retrace95%retrace
03 · SIGNAL & RISK
From the signal to the trade plan
Every Yard Charts alert draws these levels for you, so you know the entry and where the setup fails before you act.
Price retraces 90%
The first alert fires when price has retraced 90% of the distance from the recent low to the resistance.
Sell near the resistance
The second alert fires at 95%. The bearish entry is taken as price nears the horizontal resistance.
Stop above the resistance line
Set the buy stop above the resistance. A close over it means the level has failed.
Reading the risk/reward. Selling near the resistance keeps the distance to the stop small. Our alerts project a reward zone at three times that risk, below the entry.
04 · WHY IT WORKS
Old support turns into resistance.
A known levelThe launch point is where sellers already proved their strength once.
Trend intactA retracement to resistance is a pause in the downtrend, not the end of it.
Second chancesTraders who missed the last leg down wait at the level to sell.
Tight, clear riskThe stop sits right above the resistance, so the risk is small and defined.
05 · IN THE WILD
A real alert from our scanners
NIKE, flagged on the daily scan of 2026-02-20.
NKENIKE · Consumer Discretionary
DAILY ALERT · 2026-02-20- SELL
- 68.49
- BUY STOP
- 69.14
- RISK
- 0.9%
- 3R ZONE
- 66.54
Retracement up to the 69.14 resistance lineOpen the alert chart
Where these come from
NIKE is a NYSE stock, so its alerts come with Standard. ETFs, Forex, Crypto and BSE are in the Free plan.
Compare plansHistorical performance
Historical cases show meaningful downside when confirmation and risk management are respected: sell near the resistance, keep the stop above it.
Its bullish twin: Horizontal Pullback
The same idea in an uptrend. Price pulls back to the horizontal support that launched the last leg up, and the buy sits just above it.
READ ALSO
The other seven patterns
Let the scanners catch the next retracement.
Every alert comes with the sell, the stop and the reward zone. Free forever on 4 markets.