This entry could prove profitable, but only if the entry precision was significantly modified. The entry point this guy has chosen here certainly wouldn't look anywhere near wise to a shark-scaled professional.
It's the kind of situation where I'll not only be watching the depth levels building and subtracting, to see where the actual S/R's are, rather than on the chart, but also the tape, waiting for 250-car lots to give more median direction, 100-lots to tell me where the other scalpers want to take it short-term, as well as particularly for lots of (probably red) 1-4 car orders scrolling through, as a contrarian signal.
I won't explain what I mean with using low-quant lots on the tape as a contrarian signal. I'd say you can think your own part about that. Hint : It's got to do with the harsh reality of the markets.
It's better to be the shark than the shark's dinner.
So, sure I wouldn't do a longer-term short play on it. After all, it looks like there's a good amount of strength in the pattern, there's an uptrend with higher lows, and there's too many bars closing higher, and the shapes in general are much more conducive to continuation either way. Certainly not the ideal setup for a double-top, at least not on the chart. I'd have to look at correlation to the other index as well as market internals to make that decision. Just to look at one chart, on top of that without volume, isn't exactly conducive to making a good decision regarding stop-placement. You need to give more information. You don't need any TA, indicators, any snakeoil humbug like that whatsoever. But you do need both price and volume to make a proper evaluation.
Now, where would I place my stop for the scalp then? First, I'd preferably enter 1-2 ticks above your entry anyway to squeeze up my prob, since the locals are gonna take the market there for stop hounding anyway. Also, you then have a minor-TF swing that's continued for 8-9 Ticks, which (given current ~8-13T swing range) drastically increases prob for a short-term pullback of at least 6T from that turn. Preferably, I'd put my stop 4T above a 10T-continuation peak entry, since a 14T-swing is relatively unlikely on ES, turns tend to go at max ~13T. If I was forced to take your entry - which I honestly wouldn't, even for a scalp (Unless you tied me up and threatened to gag me with the pair of socks you've been wearing for the last 3 weeks), then I'd have to take a 6T-risk, because given the swing it's likely the floories will take it up there and take you out for dinner otherwise. While this, IMHO, is a silly R:R ratio, this is what you're asking for.
I'd lock in at least 1/2, if not 3/4 as soon as the pos goes 4-5T in my favor, then close out the other half at 7-8T profit, most probably. But since your entry would neither offer 1) The low risk-stop required to do so nor 2) Offer locking in these kind of profits on reversal of the swing, since you're selling right in the middle of the swing, I would 3) Never take such a trade.
Compliments,
Scientist.
