Tuesday, May 21, 2013


1) ES opened at 1665.75; in the middle of the 1665-1667 zone. With the WHITE ZONE below at 1661-1663 buyers were clearly in control.   This information was critical to the opening sequence as deciding weather or not to fade the open can have a big impact on your day.  

In following the highest odds strategy, the plan calls for not taking shorts when trading above the WHITE ZONE.  It prevents traders from getting run over. Half the battle of trading is not taking a string of losses.  A loss averted is the same as a winning trade to me.  

2) Buyers drove ES up aggressively through the top of the zone.  In a drive like this,  the first zero tick will often provide and excellent entry point 7 today it was just that.  The move back to 1667 coincided with a zero tick reading and set up a solid trade to the long side with a potential 2-3.5 point target. 

3)  Buyers made one last push higher into the Initial Resistance Zone of 1669-1671 & giving longs who entered at 1667 an excellent opportunity to exit their longs.   I expect responsive sellers at Initial Resistance & I tweeted that I would not be taking long setups on rotations lower.  For aggressive traders this zone offered excellent risk reward for a short side play.  Sellers pushed ES back down to the 1667-1665 zone.  Again,  I was not looking for longs as I expect larger rotations down & up from Initial Resistance/Support Zones. 

4)  Sellers were able to push all the way down to the 1663-1661 Initial Support Zone.  Again, I expect responsive buyers at Initial Support and the middle to back of the zone offered excellent location for longs.  After a bit of chop buyers were able to drive ES all the way back to Initial Resistance & passed during the lunch period. I tweeted that I would not be taking any shorts prior to the push up into Initial Resistance.  It was the second time into  the zone which means its a lower odds trade; normally requiring additional support to take a counter trade. It was also time of day & price action indicated to me that shorts wee on the run.   Lunch time is the hardest time of day to put on a trade & make money consistently outside of the last hour. Always looks easy afterwards but almost never is.  

This scenario has been played out multiple times over the past month.  We find sellers, they push down hard 10-20 points & buyers come in and push all the way back up.  As usual- late comers in both directions were smoked, as it should be.  

5&6  Buyers were finally worn out on the second push up to 1673.25.  3 ticks shy of the 1674-1676 resistance zone.  These zones are a bit less reliable as they are calculations only- we have never traded here before.  Responsive sellers pushed ES back down to 1669-71 zone and chopped before finally pushing down to 1667-1665 zone on the close.  

Personally I dislike afternoon trading.  My numbers say its harder and the chop in the 1669-71 zone bare that out.  Few traders have the ability to withstand the chop and pushes up to grab the reward at the end of the day.  I did tweet that if we close below 1669 on a 5 minute bar that the market would find additional sellers and we did.  That came in the last hour and its just not in my trade plan to take trades there.  Too many things can go wrong.  For those who did catch it- nice job.  

Well, I am wiped.  Basically nailed the high & low of the am session & did not get run over in the open drive.  If you can do that successfully and simply wait for good risk reward location entries you should be able to make money. Another day and trade location trumps all-again.  Tomorrow we get to do it all over. 

If you read this blog & have made a profit from the zones, please donate to an organization that helps humanitarian efforts in the US or around the world.  There are many who are not blessed with the opportunity to do what we do.  Please give back. 

NOTE: Rates have gone up for my 4 session introductory coaching sessions.  I will honor the $200 for 4 sessions till Sunday Night 11:59 PM central time.  Its an amazing value.   


“We make a living by what we get, but we make a life by what we give.”
Sir Winston ChurchillNotice: This Blog & its contents are intended to be for educational purposes only & not to be construed as trading recommendations  in any way.  You should not follow anyone blindly.  Trading Futures & Options on Futures involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions are subject to change at any time.


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