Hello traders,
I thought of posting a simple chart illustrating upthrusts and springs, as I apply this approach to most of my trading idea. This will help you identify what are the false breakout that occurs and where it usually occurs.
What is a Spring?
1. They usually occur late within the trading range
2. Serves the propose of providing market makers with additional supply from the weaker hands at the lowest prices
3. If volume of the breakout of previous support is very low (no real supply) then you can expect a spring to occur
What is an Upthrust?
1. Occurs in the trading range of distribution.
2. The price move above the resistance level of a trading range that quickly reverse itself and moves back to the trading range (happened in Bitcoin few days ago)
3. Its a bull trap, where it appear that there will be a start to a new uptrend but in reality marks the end of the up-move
Of course, there is much more to learn about them, so look up these terms and get to know them better if. Some traders actually live off trading only upthrusts and springs!
Please feel free to ask me anything in the comment section below - Lets keep it an open discussion as we did last time! - Abdulla
I thought of posting a simple chart illustrating upthrusts and springs, as I apply this approach to most of my trading idea. This will help you identify what are the false breakout that occurs and where it usually occurs.
What is a Spring?
1. They usually occur late within the trading range
2. Serves the propose of providing market makers with additional supply from the weaker hands at the lowest prices
3. If volume of the breakout of previous support is very low (no real supply) then you can expect a spring to occur
What is an Upthrust?
1. Occurs in the trading range of distribution.
2. The price move above the resistance level of a trading range that quickly reverse itself and moves back to the trading range (happened in Bitcoin few days ago)
3. Its a bull trap, where it appear that there will be a start to a new uptrend but in reality marks the end of the up-move
Of course, there is much more to learn about them, so look up these terms and get to know them better if. Some traders actually live off trading only upthrusts and springs!
Please feel free to ask me anything in the comment section below - Lets keep it an open discussion as we did last time! - Abdulla
