What is Drop Base Drop in Trading?

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Ali
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What is Drop Base Drop in Trading?

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Drop base drop refers to a supply zone that forms when a price drop is followed by a base region (consolidation), and then another price drop occurs, making a Supply zone. it is also denoted by DBD in supply and demand trading.
drop-base-drop.png
The supply zone represents the presence of institutions' sell orders. When a supply zone forms on the chart, institutional traders fill their pending sell orders from the supply zone to decrease the market price.
DBD pattern forms during the bearish trend.
On the lower timeframe, a drop base drop pattern will represent the formation of an impulsive bearish wave, a sideways consolidation, and, again, a bearish impulsive wave.
Usually, the price returns to the consolidation region or base region to fill the pending sell orders, and then the price continues to decrease.
supply-zone.png
Example #1
This is the DBD pattern example in the BTCUSD chart.
Identify the big bearish candlestick, then base, and then again a big bearish candlestick.
We always use the high and low of base candlestick to draw the zone.
Price picked the pending sell orders from the zone and then continued the prior bearish trend.
Supply zone example 1.jpg
Example #2
A base region can contain more than two candlesticks. because the main psychology behind this supply zone is the combination of:
Impulsive bearish wave + sideways range + bearish Impulsive wave
In this example, The base region also has two candlesticks. The price has also been returned to the zone to pick up the pending sell orders.
DBD Supply zone example 2.jpg
We will also place sell orders from this zone along with the institutional traders so we can also follow the market makers' trend.
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