Rocketships and Piledrivers pt.2

Here is another rocketship. MDCO. I didn't catch any of the long and so was watching for the momentum to exhaust itself. Gravity usually takes effect on a huge move like this. The trick is all in the timing.

Right after the new candle begins I initiate a short, place a protective stop above the high of day so MDCO would have to make new highs in order to stop me out.

The trade immediately goes my way so I add more size about every .50 down. I do this because I add to my winners and let momentum pay off.

Never add to your losers, close them out instead.

Now I am waiting for a place and time to exit. On a bigger candle I see my chance and easily buy to cover from all the sellers.

The same technique can be used on a stock pilderiving lower as well.