《Breakdown and Rebound: The Golden Rule to See Through Institutional Traps at a Glance》
Have you ever encountered this situation — the price breaks a key support level and suddenly rebounds, and just as you chase the short position, you get trapped? The market is always playing psychological games, and "Breakdown and Rebound" is the killer move to see through institutional schemes.
The true breakdown and rebound hide 3 fatal details
The bait of false breakdowns: 80% of "breakdowns" will rebound, but only 20% can truly continue to decline.
Key to watch is the trading volume — a reduction in volume after a breakdown followed by a rebound is a real signal for a downtrend.
The limit position of the rebound: Professional traders focus on the "Three-Thirds Rule" — the rebound amplitude should not exceed 1/3 of the breakdown amplitude, and the time should not exceed 3 candlesticks. Exceeding this limit indicates a false breakdown.
The harshest harvesting opportunity: When the rebound touches the original support level (current resistance level), if a long upper shadow or MACD divergence occurs, the success rate of shorting at this moment doubles.
Two fatal misconceptions for retail investors
Chasing shorts mindlessly upon seeing a breakdown (institutions are just waiting to eat your stop-loss)
Blindly bottom-fishing during a rebound (you can't catch falling knives)
Next week, I will reveal a harsher truth: Why do 90% of people not use breakdowns and rebounds effectively?
Because you overlook the most important "Time-Space Resonance Principle"...
Remember: The market is always looking for a buyer, and the true hunter only pulls the trigger when the rebound power is exhausted.
