How I set the bias
RIVN 0.00%↑ was gapping down after a previous day hammer, continuing longer term ABCD trend continuation down. Gapping down after previous green hammer is a good sign of weakness too.
On the 60-min chart, it was about to break the previous resistance point. Another reason to look for a short.
The 5-min chart was showing sideways consolidation.
Also, the 15-min chart was showing a 3BAR play setup
Those are 4 solid reasons to watch this stock for a short break-down entry as the expectation is to catch quite some stop loss orders of the traders buying the stock 2 days ago, hoping for a bigger bounce which today was about to fail.
Entry rules
4PC means 4 Pre-market Candles in this case. It is my own methodology for playing ORBs. I play the break-down of this range.
The fact that 10.80 was the previous day’s low made me confident to enter sooner than the range actually broke, and I took it as a traditional 1-min ORBD setting the stop at the high of previous candle at 10.80 while entering at the break of previous candle at 10.70. I caught a slip of 1 cent so 10.69 was the entry which is still a more aggressive entry than the break of the actual 4PC range at 10.65. The more conservative entry would make the same trade profit.
Trade management
Trade management of this setup is very simple. Target is 3R and after a 2R move I set my stop to 1R. In this case, when the price action reached 10.47, I moved my stop to 10.58 and still targeting 10.36. When I saw how erratically it broke below the 10.36 I decided to target 1R more and move the stop to 3R. It nearly touched my 10.25 target, just shy by 1 cent only, which showed to be the low of the day.