Bounce Exhausting Market Trade Signal
​Signal for Swing Trade Entry
Signal for Long Term Investment Entry

​Bounce is an exhaustion based trade setup.

Bounce Long takes place when there is heavy selling at or near a Support Memory or well established/deep Watermark level. After such capitulation, there may not be any seller left to push the price down. And the path of least resistance is upward. Even low volume buying may press the price up, at least enough to take a Bounce Long trade and exit with a profit.

The reverse scenario takes place during Bounce Short.

Bounce Trade Signal has no requirement on Weekly chart and a trader identify it from only from the Daily Hop On chart.

For Bounce Trade, profit may be booked either once the Profit equals the Risk amount or when the Market reaches the next Direction Line, Memory or Boundary Line.

Trade Entry is to be taken only if Potential Reward (distance between Entry Price and Initial Profit Target) is at least as much as Potential Risk (distance between Entry Price and Initial Stop Loss).[/vc_column_text

Daily CUE Hop On Chart Checklist

​All of following conditions
Bounce Long
Bounce Short
Heavy Activity on or just prior to Signal Day
Heavy Activity on or just prior to Signal Day
Support Resistance
After rapid decline, price moving up from well established Watermark or Memory Line
After rapid increase, price moving down from well established Watermark or Memory Line
Relative Performance
Bullish ­- Ascending
​​Bearish -­ Descending
Candle Shape and Closing Price
Bullish ­- Hollow or one with
Long Lower Tail and Closing above previous day’s Close
Bearish ­- Solid or one with Long Upper Tail and Closing below previous day’s Close
Reward Risk Ratio
​At least one or more
At least one or more

Weekly CUE Backdrop Chart Checklist

Not Applicable
Bounce Long
Bounce Short
No requirement
No requirement
No requirement

Bounce Charts

  • After rapidly going up with Heavy Activity, at point 1, the Stock hit Memory Resistance and declined. This decline created a Bounce Short Trade Setup, and the Stock moved down from there. There was Memory Resistance in Weekly too. Thought that was not a necessary condition for Bounce Trade Setup, it provided an additional edge to the trade.

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