Buy A Bounce


DEFINITION of 'Buy A Bounce'

A strategy that focuses on buying a given security once the price of the asset falls toward an important level of support. Traders who "buy a bounce" attempt to profit from a short-term correction or "bounce" off of the identified support.


In order to use this strategy most effectively, a trader has to be sure that he or she is able to identify a valid level of support. Some traders may wish to enter a position before the signs of a bounce off of a support level, but generally this is a high-risk strategy and can result in devastating losses. Most traders will want to confirm a bounce off of a support level by using a combination of other technical indicators before entering a position.

  1. Confirmation

    The use of an additional indicator or indicators to substantiate ...
  2. Indicator

    Indicators are statistics used to measure current conditions ...
  3. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  4. Support (Support Level)

    The price level which, historically, a stock has had difficulty ...
  5. Trendline

    A line that is drawn over pivot highs or under pivot lows to ...
  6. Trend Analysis

    An aspect of technical analysis that tries to predict the future ...
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