ES flushed through the 1614-1616.25 zone on second touch and rotated down to the 1609.75-1611.75 to the tick. I expect buyers to show up first time into initial support & they did. (2) My trade plan calls for a short into a zone on first touch after the zone has been broken-designated by a close below the zone on a 5 min bar. The rotation up from the 1609.75-1611.75 to the 1614-1616.25 triggered that trade. For the purpose of this blog I use a 3 point stop on trades. This is not a trade recommendation, its simply a number that works for this particular trade. You as a trader need to figure out what size stop works best for you based on your risk reward profile and trade style. The rotation I expected to develop on first touch never came & ES continued to rotate up to 1617 & triggered a stop- to the tick. The close above the zone on a 5 min bar also placed buyers back in control. I noted as much on twitter.
The close also started the trade sequence over again and the first dip back into the WHITE ZONE would trigger a long entry per the trade rules.(5) ES rotated up from the WHITE ZONE back to 1619 to 1621 zone. (6) The close above the 1619-1621 zone set up another long but as has been the case for several weeks now, the last hour has been totally worthless. The long was never able to make an extension but no damage was done either.
Larger picture buyers are in control. I would expect buyers to continue to step in on larger rotations down. take note of the larger two way rotations. This may be a new market behavior & if so would set up a nice environment to leave trailers on if that is in your trade plan. The blog will continue to focus on two point rotations and only the highest odds trades.
Net net the strategy had 3 trades, 1 winner, 1 loser & 1 break even. Ended the day down 1 ES point. Had I not passed on the long after buyers established control the day would have been profitable. Noted. Hope everyone traded well.
I don't believe in team motivation. I believe in getting a team prepared so it knows it will have the necessary confidence when it steps on a field and be prepared to play a good game.