Whipsaw

Definition - What does Whipsaw mean?

Whipsaw is a slang term for any sharp move in price action that is quickly followed by an equal or greater movement in the opposite direction. A currency pair's price action may whipsaw up and down multiple times during volatile periods. The length of time that currency pair's price action will spend whipsawing back and forth depends on what event triggered the concentrated buying and selling.

ForexDictionary explains Whipsaw

Whipsawing is fairly common on smaller time frames in the forex market. When certain technical indicators are breached, some traders see a breakout and go long while other traders see a false breakout and go short. The simultaneous up and down pressure plays out on the chart until one group prevails. On longer term time frames, whipsaw movements are usually the result of major releases or news events.

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