#ReboundRally A rebound in trading is a situation when the price of an asset that has been falling for a certain period of time begins to rise. This often happens after a sharp decline or after reaching a support level.
How rebounds work in trading:
• Technical analysis: Traders look for support levels or oversold zones (for example, according to the RSI index) where the probability of a rebound is high.
• Fundamental analysis: Changes in news or company indicators can trigger a rebound.
Types of rebounds:
• Dead Cat Bounce - a short-term rebound, after which the decline continues.
• True reversal - the price not only increases, but also forms a new uptrend.
Strategies for playing on rebounds:
1. Entry near the support level - buying after a sharp decline when signs of stabilization are visible.
2. Position protection - setting a stop loss just below the support level to minimize risks.
3. Exit at resistance levels – sell when the price approaches the resistance level or reaches a certain profit level.
Want examples of specific indicators or situations for practicing rebound in trading?