Sometimes it takes more than one attempt.
How I set the bias
3 and more 5-min candles up
into a resistance on the higher time frames (daily)
clearly the 200 SMA (purple) is the bouncing area
close or around daily ATR(14) move
in this case it was more than ATR already without any pullback
In the direction of the daily trend or in a range
the overall stock trend is down on the daily
Entry rules
I must say that I was late into this reversal, but they rarely reverse in a deep fall without any wave.
As I was late, I was waiting for a wave pattern, which came at 10:25.
I set the stop at the previous candle high as the belief here is that the stock will never go higher as it is building a lower highs pattern.
For the first entry, I have no regrets, as it did exactly what I was looking for - higher volume to the upside while engulfed with lower volume red candle (at that time). Unfortunately, It was a losing trade as it came back to my entry.
The trade became valid again at 10:28 as it broke down a failed breakout candle, so there I was back in the trade.
Trade management
As usually, targeting:
5R
VWAP
50% of previous move
Whichever comes first, and also using Parabolic SAR as a leading indicator for the exit in case I have any doubts during the trade.
Once again, I started to overthink the target after I saw that 10:31 candle drop, which fell below my 5R target, so I changed my mind and targeted VWAP. Vwap was hit a few minutes later, and I re-evaluated once again, seeing the PSAR still so far away. So I dragged the stop loss order to 30.26 which was the high of the high volume candle falling below VWAP as I believed that it this candle is engulfed, the trade will bounce.
This turned out to be a mistake by 1 cent as I got tagged by the price action before it continued moving lover. The whole move was 17R for the day and I got 7.5R out of it. To my defense, a Parabolic SAR exit would be exactly the same.