Rally-Base-Drop
Supply

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.

Supply Zone1H, Daily3:1 R:RConservativeAny
1-6 candles
Base Size
Fresh Only
Validity

Rules & Configuration

The full rule set, required indicators, suggested configuration, execution flow, and performance parameters for the Rally-Base-Drop Supply setup.

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.

Swing High/LowVolume
📉 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.

Common questions

What is the Rally-Base-Drop Supply strategy?

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.

What's the pro tip for trading Rally-Base-Drop Supply?

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.

What indicators does the Rally-Base-Drop Supply strategy use?

The Rally-Base-Drop Supply strategy uses the following indicators: Swing High/Low, Volume. These can be configured directly in AlgoBars AlgoBuilder.

What timeframe works best for Rally-Base-Drop Supply?

The Rally-Base-Drop Supply strategy is best traded on the 1H–Daily timeframe. This can be adjusted based on your trading style and market conditions.

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