True scalps typically last only a few minutes, at the most, but HEY! it's my blog and I'm going to call these trades scalps for lack of any better term.
If you haven't seen these setups before, go to the right panel on the blog and check out the previous posts for GE/NYAD trades under How I Trade.
Going into this trade I've got to admit a little apprehension, as I was expecting the market to take off to the upside following the opening fade down so shorting was the opposite of the direction of my preferred trades for the day.
NEVERTHELESS. . .the NYAD was clearly flatline at 10:18 as GE began an abrupt ascent on no noticeable volume surge. With GE blowing through the PP pivot at 10:38, the odds for a pullback were high.
The PP penetration is followed by a little waffling at the PP for the next 8 minutes, when the parabolics trigger a SELL as GE penetrates and closes below the PP. This is bearish and supports the argument for a pullback down to the NYAD extension line (orange/blue).
Just going into the trade at 10:48 at $17.65 my expectation is for a retreat to the previous 10:15 low of 17.35 and if the NYAD shows weakness, then a hit or break of S1 at 17.24 so the risk/ reward looks pretty attractive.
GE does retreat to the NYAD extension at 11:24 and at the first parabolic COVER at 11:28 I'm out at $17.42. Obviously, I should have stuck with this thing a little longer, although the second parabolic COVER signal at 11:46 would have only netted an additional .06, so I don't feel THAT bad about my exit.
Net time in trade: 10:48 - 11:28 = 40 minutes
Net trade gain: 17.67 - 17.42 = .25
As I've mentioned before, these trades typically generate about .01/minute of exposure, so this trade was a bit sub-par. Whether this marginal performance was the product of an upward biased market is subject to dispute, but I'm flat again and waiting for the next setup.
Also note that I've changed the MAs on the chart from 8/16 to 4/8, in order to confirm the parabolics a bit quicker. This is just something I'm working on. The downside of using the 4/8 in lieu of the 8/16 is that there are going to be a lot more whipsaws and false exit signals from otherwise good trend trades.