Even the best–behaved price swing or trend has pullbacks, which are moves of lesser magnitude in the opposite direction of a significant swing or trend.

Traders like the foreign exchange market because currencies tend to move in large swings that mirror big economic trends, such as the emergence of inflation or whether a currency’s central bank is on top of things or behind the curve.

What traders don’t like are the pullbacks that eat away at profits. We’d all like to emulate George Soros and take big–picture bets lasting for months, but it’s not realistic — few of us have the capital to sit out large countertrend swings.