Imagine you're playing a game where you watch numbers go up and down, like a bouncing ball. In this game, there's a special zone between 930 and 1030 - think of it like a fence.
Sometimes, when the numbers fall below the fence (below 930), traders want to know if the numbers will bounce back up and touch the top of the fence (1030). Looking at past games, they found that about two out of three times, the numbers do bounce back up to touch the top.
This helps traders decide if they want to "bet" that the numbers will keep going down (called taking "shorts") or if they might bounce back up. It's like predicting which way a ball will bounce!
But remember, just like you can't always guess where a bouncing ball will go, this pattern doesn't work every single time - it just helps make better guesses.
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