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
American Option
An American Option grants its holder the flexibility to exercise the contract at any point...
Accrued Interest
Accrued interest is the interest that accumulates during the current accounting period but remains unpaid...
Dividend Stripping
Dividend stripping is a strategy where an investor buys a company’s stock just before the...
Hammer Candlestick Pattern
A Hammer Candlestick pattern occurs when a stock, commodity, or currency opens lower than its...
Discount Brokers
Discount brokers are platforms that provide essential stock trading and investment services without offering the...
Convertible Arbitrage
Convertible arbitrage is a trading strategy where investors buy convertible securities (like bonds or preferred...
