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General TradingC
Cover On A Bounce
Cover On A Bounce is a short-selling strategy where a trader closes their short position when the price bounces or rebounds from a support level. The trader takes profit on the decline and exits before a potential reversal erodes their gains.
Example
“The trader shorted the stock at $80 and covered on a bounce when price hit the $65 support level and printed a strong bullish reversal candle, securing a $15 per share profit.”