Rebound and Pullback

Rebound and Pullback:
A more professional question. Clarifying these two concepts is very helpful for judging market nature.
Simply put: a rebound is "an upward move after a decline," and a pullback is "a confirmation after a breakout." The core difference between the two lies in the trend's position.

| Detailed Explanation Below: | Rebound | Pullback | | :---------------------------- | :------------------ | :------------------------------------------------ | | Occurrence Location | During a downtrend | After breaking through a key level (upward or downward breakout) | | Direction | Temporary rise | Return to the previous direction of the breakout (rise after a pullback, or fall after a rebound) | | Prerequisites | Previous decline | An effective breakout earlier (breaking resistance or support) | | Duration | Usually short, 1-3 candles | Usually short, 1-3 candles | | Follow-up Expectation | Continue falling after rebound | Confirmed pullback continues in the breakout direction |

| Judgment Dimension | Rebound | Pullback | | :------------------- | :------------------------------ | :-------------------------------------------------------- | | Previous Trend | Continuous decline, no breakout | Just broke through an important level (moving average, previous high, previous low, trendline) | | Subsequent Trend | Continue to new lows after rebound | Continue in the breakout direction after pullback (up or down) |

| | Rebound | Pullback | | :------------- | :--------------------- | :------------------------------------------ | | Can you go long? | ❌ Not recommended, easy to get trapped | ✅ Pullback end is a good point to go long | | Can you go short? | ✅ Rebound high point can be shorted | ⚠️ Depends on the direction: after an upward breakout pullback, do not short |
| Position Management | Reduce positions during rebound (exit long positions) | Add positions during pullback (add after confirmation) |

One sentence summary:

A rebound is a "catching breath" during a decline, and the market continues to fall afterward; a pullback is a "step on the brake" after a successful breakout, and the market continues along the breakout direction afterward.
Judgment method: Check if there has been an effective breakout before — if yes, it might be a pullback; if not, it’s just a rebound.

Diagram of rebound and pullback: