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Glossary — R
Range
A horizontal trading zone bounded by defined support and resistance levels where price oscillates without establishing a trend. Range-bound strategies buy at support and sell at resistance.
Rectangle Pattern
A chart pattern where price bounces between parallel horizontal support and resistance levels. Can be a continuation or reversal pattern depending on the breakout direction.
Rejection
When price tests a level but fails to hold and reverses away from it, often shown by long shadows (wicks). Rejection candles at support or resistance are important reversal signals.
Resistance
A price level where selling pressure historically prevents further upward movement. Resistance acts as a ceiling that price struggles to break above.
Retest
When price returns to a recently broken support or resistance level to test it from the other side. Successful retests (where the old resistance holds as new support, or vice versa) confirm breakouts.
Retracement
A temporary reversal in price direction within a larger trend. Retracements are typically measured using Fibonacci ratios. A shallow retracement (23.6-38.2%) indicates a strong trend; a deep retracement (61.8-78.6%) may signal a reversal.
Revenge Trading
The destructive habit of immediately entering new trades to recover losses from a losing trade, often with larger size and less planning. One of the fastest ways to blow up a trading account.
Reversal Pattern
A chart pattern that signals the current trend is about to change direction. Bullish reversals appear at the end of downtrends; bearish reversals at the end of uptrends.
Risk Management
The process of identifying, assessing, and controlling trading risks through stop losses, position sizing, diversification, and maximum drawdown rules. Without risk management, even the best patterns will eventually lead to ruin.
Risk-Reward Ratio (R:R)
The ratio of potential loss to potential gain on a trade. A 1:2 R:R means risking $1 to potentially make $2. Most pattern traders target a minimum of 1:1.5 or 1:2.
Rising Wedge
A bearish pattern formed by converging upward-sloping trendlines where the support line rises faster than the resistance line. Despite the upward bias, the narrowing range signals weakening buying pressure.
Rounding Bottom
A bullish reversal pattern that forms a gradual, U-shaped curve as selling pressure slowly gives way to buying pressure over an extended period. Also called a saucer bottom.
Rounding Top
A bearish reversal pattern that forms a gradual, inverted-U shape as buying pressure slowly fades and selling pressure increases. The opposite of a rounding bottom.
RSI (Relative Strength Index)
A momentum oscillator measuring the speed and magnitude of recent price changes on a scale of 0-100. RSI above 70 suggests overbought; below 30 suggests oversold.
Runaway Gap (Measuring Gap)
A gap that occurs in the middle of a strong trend, indicating continued momentum. Also called a measuring gap because it often marks the halfway point of the move.
Rising Three Methods
A five-candle bullish continuation pattern: a large bullish candle, three small bearish candles staying within its range, then another large bullish candle closing above the first. Shows the trend is just pausing.
Relative Volume (RVOL)
Current volume compared to the average volume for the same time of day. RVOL above 2x indicates unusual activity and strengthens chart pattern signals. Used to filter high-conviction setups.