Hi mel,
yes mitta does like that kind of setup. They occur in a few different forms, and we are only searching for one of those forms right now, but it seems promising.
I was a bit unsure about some of those potential springs on your post, and just wanted to confirm your understanding of them, because I couldn't see one in each chart.
A spring is seen when price comes back to a level where support has previously been seen, and briefly dips below that level (effectively re-testing the support level to see if the support is still present), but price does not continue to breakdown, instead the support kicks in strongly and price closes back above previous support level again. This generally confirms support is present and that level is being defended, it also suggests that professional interests are involved, and if they are defending a level, that they will also mark up the price at the appropriate time (and we can jump on their coat tails and join in on the ride).
I generally like to use the most recent, or a fairly recent level where price has initially found support.
You 'can' use an older level, but they often are not as reliable or a consistent to use.
Also- a spring is often seen at a low pivot, but they are regularly seen at other levels of the chart as well, and also after a breakout.
Finally, a spring works best or most consistent in an uptrend, or with potential strength (buying) in the recent background, and less well, or less consistently in a downtrend or with potential weakness (selling) in the recent background. That is not to say a spring will not work at all in a downtrend, just that its strength may be subdued and its duration reduced.....
Finally - it might be a bit counterintuitive, but little tiny shallow springs are much preferable and work more consistently to big fat deep springs, as the little shallow springs show support coming in immediately as the level is defended and infers that support is strong. Whereas a big deep spring shows that while support did eventually come in, but it took some time to muster enough support to hold price up, and suggests that if much more supply came in, or if supply was ongoing, that the support maybe quite vulnerable to being overwhelmed, leading to a failed spring, and price breakdown instead of a price rise.
That is not to say that big fat springs Will Not work, just that they are can be less consistent, and leave the trader unsure just how strong the potential support is.
Below are a couple of examples of springs.....the first is a 'normal' spring of a low, and the second is the spring of the test of a breakout.
On the spring of the low, I marked a line where support initially came in, and you can see that price came back down and moved below that line, and then recovered to close back above it. And the little dip below the line is the spring (or price is said to be on the springboard)
The second is a spring of the test of a breakdown.
On this one you can see the breakout above the line, then price comes back and tests the strength of the breakout, and then on the secondary test of the breakout, price dips below the initial test bar, before recovering and accelerating away. That little dip below the initial test is the spring.
View attachment 475832
Was that your understanding ??
or did I miss something ??
cheers
