Bounce Trades

In real terms every trade is either a ‘bounce’ or a ‘break’ strategy trade and allTutorial Magnifying Glass trading decisions are taken based on an understanding of the likely outcome of a particular interaction of price with a key price level.

In the case of a bounce trade we as traders are looking for a setup that suggests with a high probability that price will reject a key level and move back away from it, rather like a dropped tennis ball hits the court surface and bounces back up.

The trick to this trade therefore is to identify those possible key levels and then spot the price action that indicates a bounce is likely.

Bounce trades work equally well going long as short and as with all trading, setups in the direction of the dominant trend are preferable.

Check out the video below for further explanation.

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