My next play was in RIG after it had gaped down under 3 days of consolidation seen here on the 60 minute chart…
60 min chart of RIG
As price action filled the gap I took the first 5 minute sell near reversal @ 9:50 and price sold off hard. I had high hopes that I would reach the bottom at 45.50 but back to back bottoming tails appeared on the 2 minute chart. I decided to take my chips off the table with about 1/2 R gain on the play. The decision to cover all of my short shares is not an easy one to explain here, it’s a feeling you get after trading for a few years. I checked my indicators Tick/Trin, VOLD and Vix, the market, everything looked bullish and as you can see by the chart, RIG took off upward finally breaking through to the upside. Even though my trade was not a smashing success, it was taken with market alignment at reversal time on a stock that just gaped down breaking major support, basically, the odds were in my favor and this is what trading is all about. Place the odds in your favor more often then not and your losing trades will look like small wins or scratch trades…
