Bounce Trading
Bounce trading involves buying a security when its price drops to a support level, expecting it to rebound to a higher price. It relies heavily on technical analysis, using tools like support lines, chart patterns, and indicators to predict the bounce. Traders aim to profit from short-term price reversals, employing strategies such as trendline breaks or candlestick patterns. Success hinges on accurately identifying support and timing the entry, with the goal of selling at a predetermined target as the price recovers from its dip.
Related Terms
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Exponential Moving Average
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