What is The Rebound?
The Rebound is a strategy to help you achieve entries when the market does a second pass or move. It usually occurs right after a slight retracement/retest of a trend line or S&R level. The Rebound is a very efficient and safe way to enter a trade. After getting a confirmation it is good to enter, The Rebound can be a much more reliable trade then the initial move or pass. Most times you will miss the initial move or pass so The Rebound will give you another chance to get in. The Rebound sometimes will also resemble the M & W formations which are taught in previous lessons.
How do I use it?
The way to use The Rebound is quite simple and often made more complicated by a trader with an excessive amount of indicators. When trading a downward trend and looking for a long position, you will first want to look for an upper parallel and resistance level nearby. Once price breaks the upper parallel and in most cases the resistance at the same time, it will retrace back to the support (which was a resistance) and try to break it. When it fails to break back below it, it will continue its uptrend which is when you could enter. In some cases, it will rise 50-100 or even 200+ pips to the next resistance, but sometimes it may only move 20-50 pips and go into consolidation, so the context and timing are critical. Remember always to move your SL to breakeven or in profit. If price fails to break passed the first move up you can also look to rebound on a short position.