Sorry about the late reply. I somehow missed your comment that was pending approval on the blog.

Anyway, there are many examples of trades like this, where we buy above the high of the reversal bar. Check the category (on right sidebar of blog) to review the “actual past trades,” as well as “top stocks on our screener watchlist.” You will see more examples like this. In fact, the blog post I will be making today (re. $IBB) is this type of setup.

Hope that helps.

Do you have more examples of short trades like this?

@CuoreNero Good question. Actually, buying above the May 2nd high would have been perfectly acceptable as well, and entry price would have indeed been a bit lower. However, our individual trade entry and exit strategy is also based on our general broad market timing system, which increases the odds of success for individual trades.

On May 1, the S&P 500 formed a false upside breakout candle, and by May 2, it had sold off to close right at pivotal support of its 20 and 50-day moving averages. So, we wanted to see just a bit more confirmation that the broad market was headed lower as well before entering the EEV (which is an inversely correlated “short ETF”). That broad market confirmation came on the day of trade entry on May 6.

Generally speaking, we are conservative traders. We usually don’t mind paying a bit higher price for a trade entry, in return for increased odds of the trade working out favorably.

Hope that helps.

Deron