Rally-Base-Drop (RBD): price rallies, bases briefly, then drops sharply. The base is a supply zone where institutional selling absorbed buying pressure. Fresh RBD zones reliably cause bearish reactions on first retest.
Indicators Used
Swing High/LowVolume
Rules
📉 Short at RBD Zone
- Sharp rally → small base (1-6 candles) → sharp drop
- Mark zone = high and low of base candles
- Wait for price to retest this zone from below
- Zone must be fresh (first test after formation)
- Enter short on bearish reversal candle at zone
- Stop: above zone high
- Target: 3:1 R:R minimum, or next significant support
1-6 candles
Base Size
Fresh Only
Validity
💡 Pro Tip
Symmetry of the drop matters. If the decline after the base is sharp and impulsive, the zone is strong supply. If the decline is slow and labored, the zone is weak and more likely to get overrun on retest. Sharpness = institutional, slow = retail.