The first up-close after a sharp decline is a mean-reversion setup. Reward-to-risk matters more than win rate here.
The first green day is the first daily close in the green after a steep multi-day sell-off — a possible short-term bottom. It is a mean-reversion setup: you are betting against the recent trend, not with it.
Bounces are quick and often fail into the downtrend. So the forward horizon is measured in a few days, and a modest win rate can still pay if the winners are larger than the losers. This is a reward-to-risk setup, not a high-hit-rate one.
The same bounce behaves differently in a broad uptrend vs a bear market (the ‘regime’). Mean-reversion fights the trend, so know which trend you’re fighting before you take it.