There was some discussion of that, and if one were being mechanical, and many people have to be at the beginning, depending on how FU they are, then, yes, there'd be a short there. But I was explaining that I like to see a little panic behind those trades, particularly when breaking out. This one was very dull, at least in real time, watching the bars form. OTOH, when price fell out of this a couple of bars later, WHAM!, and the rally effort was so pitiful, the short became a much higher probability trade.
There are no hard and fast rules for exits. My experience with cascades is that it's best to exit as soon as the cascade runs into trouble, then re-enter at the first opportunity. In fact, if there's a substantial rally, one can make more by re-entering than if he had stayed in throughout. And you never really know how much rally you're going to get. As regards the 50% level, if there's been no retracement in the meantime, and sometimes there isn't, that level is an excellent opportunity to re-enter if everything else falls into place.
I took all the exits noted on this chart, by the way, even though I expected price to drop much lower, partly because I allowed for price to take at least a couple of days to get there, and price could have rallied much higher than it did. But once each exit was taken, I looked for the first opportunity to get back in.
Parabolic moves up or down are fun and even exciting, but you absolutely must stay in the saddle. Otherwise you're thrown and getting trampled. If you can keep your seat, you can do very well on days like today.
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