In fact, avoid short sales completely during dramatic falls. When chasing momentum, safe exits vanish and risk escalates dramatically. The first rally into a sharp down gap provides a near-perfect short entry point. This low bar flags where price will likely fail. But watch out.
Price sometimes gaps back in the opposite direction.
In that case, trades must be exited immediately as the prior signal is negated. Another interesting short sale may arise when price constricts into a very tight range and volatility falls off. Positions can be taken within this quiet zone while random up ticks allow easy entry. If the trade works, price will quickly expand lower. Should price step out of congestion against your position, exit quickly.