What Is a Spring?
A Spring is a quick move below the support of a trading range that is rejected and recovers back inside the range. It tests whether there is any remaining supply at lower prices. If price cannot go lower and demand appears immediately, the test is passed.
The Spring often triggers stop-losses placed just under support, giving large buyers the liquidity they need to fill orders.
Spring vs Shakeout
A Shakeout is a more aggressive Spring: a deeper, faster drop below support, usually on higher volume, designed to scare out weak holders. Both are followed by a rapid recovery.
- Spring on low volume — little supply left; the test is clean.
- Spring or Shakeout on high volume — heavy activity, so price must recover quickly and the next test should be on lower volume.
- No recovery — the move below support is a breakdown, not a Spring.
Three Types of Spring
The shallower the test and the lighter the volume, the less supply is left in the market.
- Type 1: a deep break on high volume followed by a low-volume retest.
- Type 2: a moderate break on moderate volume that recovers promptly.
- Type 3: a shallow test that does not break support at all, showing very little supply.
Trading the Spring
1. Mark the range support from the Selling Climax and Secondary Tests.
2. Wait for a break below support and note the volume.
3. Require a close back inside the range within a few bars.
4. Enter on the recovery or on a successful retest, placing the stop just below the Spring low.
5. Target the midpoint, then the top of the range, and trail the remainder.
If price closes well below support and stays there, exit. The setup has failed and the stop does its job.
A Spring is a test, not a guarantee. Confirmation and risk control decide the outcome.