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Rebound Trading
🕑 Added 2021-09-08 12:14:47 +0000 UTCWhat is Rebound Trading
Rebound trading is the idea to make a profit from a rebound. A rebound describes the increasing prices after a drop. This is called a rebound and happens throughout the year multiple times. It’s a bit more advanced and that’s why we usually make these calls instead of letting you try it out, but this guide shows you our idea and why we make certain calls.
These downtrends can happen from anything, most commonly are SBCs. If we get an RW SBC then it's very likely to see a downtrend on other RW Cards on the market.
Indicators
There are a few indicators that make this trading method a bit easier but these are not guaranteed to make you profit.
40% Downtrend
This is something that worked throughout the past years a lot. As soon as a card has lost 40% it usually rebounds. Knowing this % helps a lot as you can set yourself buy prices and aim for these.
The tricky part is to know if a card is inflated from the beginning or not. This doesn’t work with inflated cards sadly. The same goes for price corrections, this also doesn’t work if a card gets a Price Correction. But it works for any other case and it’s a solid technique to analyze the market.
Unrelated Drops
Unrelated drops happen all the time and they are super easy to spot. Let's take the RW SBC as an example again.
With the release of an RW SBC, it's very common to see a downtrend on other RW Cards. However, if you notice a downtrend on a CB it doesn’t make sense, and it's an “unrelated drop”. I put these in quotes because there are many reasons why a CB card can still drop but we call it unrelated to simply at this point.
These drops usually rebound to the previous price. Sometimes it's just not enough to make a profit but there are many cases with drops over 5% and a rebound back to the normal price.
Panic Rebounds
This is very common for promos, especially on the Icon Market.
People are always scared of something and they decide to sell their cards in advance to escape a potential drop. However, the panic before the content release is something stronger than the market impact by the content.
In that case, the rebound happens after the content release, and it's usually strong enough to bring the cards into the profit area.
Price Correction
Sadly, this method has a clear downside and that’s called Price Correction.
Sometimes a new content gets released and a card price is corrected to a new average. Again, I will simplify this as there's a bigger process behind the supply and demand concept but let's take the RW SBC as an example for another time.
Imagine there's only 1 RW Player on the market and then we get another RW Player in form of an SBC. That will dramatically change the price of the 1 RW Player on the market as the demand is split by 2.
There is a chance to see a rebound if the price of that 1 RW Player goes very, very low but it's most likely going to get a price correction and don’t move much more anymore.
This happens a lot, especially if we get re-releases or a new better version of a previously hyped card. I cover these topics in the daily update most of the time too.
Summary
- Rebounds happen all the time
- Aim for one of the indicators
- Keep an eye for a price correction to avoid wrong buys
