This picture was from Tim g webinar. One of the last few webinars of 2014 before I officially watched all 75 of his webinars. When I was hearing his commentary on DGLY short, i noticed something on the chart on for the bounce short, and realized a mistake i often make, which a lot of the times gets me at the worst average since i'm shorting a bounce too low from the highs, in other words shorting the lows which r:r imo shifts because your risk would have to be very high.

So my thesis to solve this issue is, when a stock fades this hard early in the morning and is still very early in the day(where most of the volume is still in tact), best wait for the "real" bounce, now this isn't an exact science, but it makes a lot of sense. I think DGLY at the time was a low float and was on a front side of a move after a very huge extension, so low floats on front side moves tend to have pretty strong bounces and the more choppy the stock, the more patient i would need to be for the bounce. But the idea is to look at the overall intraday chart fade and be patient for the 50% bounce reclaim. Now not every time this would work but even if it doesn't bounce perfect 50%, if the bounce had went back to the 15s late 10:00s and shows topping action acting as resistance that would be a great short as well. The key is to be patient. Don't just randomly scale in short. Seeing the overall chart and case by case is super important.

So case by case example would be like this -  DGLY low float, stock has ran multiple days and squeezed many shorts, choppy stock(hence price action for bounces and drawdowns will naturally be more choppy = need to be patient and wait for that real bounce), stock has dropped $2.24 before 11:00am, so still very early so volume is still strong, hence based on this i would expect a higher bounce to the prior highs to attain best r:r, if it doesn't end up happening watch for topping action (top wicking) where it would act as resistance.