The Drop Base Rally (DBR) concept has been around for a long time. This is a generic price pattern that is the introduction to supply / demand (or liquidity zones) and is a great starting point for newer traders. In trading - supply and demand are critical concepts.

“Base” - “Rally” and “Drop” Concepts

There are different combinations but still only three main parts.

Base
Rally
Drop

These can present as

DBD -Drop Base Drop
DBR -Drop Base Rally
RBD -Rally Base Drop
RBR -Rally Base Rally

Rally Candles

Rally Candles (below) are a series of candles closing consistently higher.

Notice above how price is closing in the upper 75% of the candle. Notice how price in each new candle is holding above the 50% mark of the previous candle. Notice how the size of the blue bars increased in each new candle and then began to close smaller and smaller before pausing (red candle).

Base patterns

A "basing pattern" is a series of neutral (red and green) candles moving sideways.

All of these candles marked in the picture below are an iX-10 pattern (price stays inside the first left candle with a yellow circle at the bottom). We do not always get the same sort of "base" pattern and there are a lot of variations of this logic but it equals the same thing - price did not leg out.

In the Mega-Phone pattern, we have price in a range but the range continues to widen each time it is tested from the highs & lows. Always look for a range to offer additional insights - micro wedges, wedge compression, wedge expansion, iX-10, rising wedges, falling wedges, HH & HL micro-trends, pin bars, morning star & evening star candles, hammers, doji, spinning tops ...

Drop Candles

Drop Candles are a series of candles closing consistently lower.

Notice the price in the picture to the left continued to fall but without a fast expansion lower. This is different than the rally candles shown previously.

In these falling candles we can see the markets hesitation to really sell into the move and the bullish defense pushing price up while we can also see the bears defending each new close lower.

In the Rally Candles there was much less "wicking" and more expansion per candle. In these Drop Candles there is much more "wicking" and less expansion per candle.

It won't always be like this - often times the drop candles are making the bigger moves while the rally candles are making smaller moves. There will be times when it's a mix of both.

Suppy & Demand Concept

While the RBD concept is simplistic it is NOT simple; this should take a considerable period of time to develop comfort and conviction.

We want to add some more language to all of this - with a few distinct candles that make a significant impact on our chart analysis and market bias.

DOJI

There are so many different versions of a doji; just like there are different types of cars on the road. It’s advised to approach doji patterns with caution until you begin to develop a consistent approach to recognize the various types of doji and how their differences change the anticipated outcome.

We want to focus on the “common Doji” - small in overall length, with little or no body to the candle.

Bearish Reversal (found at the top of a range)
Bullish Reversal (found at the bottom of a range)

Marubozo

The Marubozo candle is a simple one to recognize - it is a candle with no shadow or wicks. A candlestick with no shadows is regarded as a strong signal of conviction by either buyers or sellers, depending on whether the direction of the candle is up or down.

No Wicks - only body.
Dominant Price Structure
Full Control

Harami

Often used as a trend reversal pattern; best applied against market highs or market lows. If the patten is found within a range - it’s not as useful.

2 Bar Pattern
Good combination w/ Marubozo Candle

Rally Base Drop concepts are just the introduction to supply and demand; these simple concepts are powerful visual aids but - they are not the only tool we have to define liquidity or supply / demand. When we combine these concepts with candle patterns and order flow tools like Cumulative Delta, Time and Sales, Level II and the DOM then we have a much better understanding of the market dynamics in play.

Evening Star

The Evening Star pattern (and it’s counter-part pattern Morning Star) is a powerful candle pattern that traders of all types can use. While we rarely get a great price gap intraday - the added comment about the gap down is worth noting.

Shooting Star

One of the three “Star” patterns I like to use; the shooting star can be an inverted hammer if we see it along the lows. Across the highs of a range - the shooting star often gives us the visual clues of trapped bulls.

Morning Star Pattern

The Morning Star is the final “star” pattern we like at the OEC. It’s a three bar pattern but the combined shape or pattern is not overly complicated and it also resembles the swing low pattern. Can be used on all timeframes (same as the other two) but with the discussion about the gap up - intraday - it’s very hard to find a price gap.

This is the second page that discusses DBR concepts. I do not have too much public material on this topic - it’s something that I teach privately in my coaching Discord.

But - this post has introduced these topics and provided a solid starting point for more research.

Drop Base Rally