A rebound occurs when the price of an asset recovers after a decline, showing signs of upward movement. It represents a temporary or significant correction following a downward trend and may indicate potential buying opportunities or a market recovery.

Traders can employ various strategies to capitalize on rebounds:

Buy on the Dip: Investors can buy assets during a rebound as it recovers from a decline, anticipating further upward movement.

Confirmation of Trend Reversal: Traders can use rebounds to confirm a potential trend reversal, adjusting their positions accordingly.

Stop-Loss Orders: Placing stop-loss orders can help manage risks if the rebound does not continue and the asset price falls again.