Wednesday, May 1, 2013


“So in war, the way is to avoid what is strong, and strike at what is weak.” 
― Sun TzuThe Art of War

ES gaped down off the open & well below the 1592-1594 WHITE ZONE. This is the zone that determines who has control of the market flow.  Above buyers / below sellers.  The focus of this blog is my highest odds strategy.  This means only taking shorts when sellers are in  control & passing on longs. ES opened in the 1586.50-1588.50 support zone.  It chopped in a 3 point range for the first 45 minutes before resolving to the down side and rotating down towards the 1582.25-1580.25 initial support zone stopping 2 ticks shy of the zone before rotating back up to the 1586.50-1588.50 zone.  My trade plan calls for me to take a short on the first touch of a zone when sellers are in control and the zone has become resistance.(1)  Prior support = resistance.  it took a little while but the market finally rotated down for the 2 point target of this strategy & continued lower down and into initial support of 1580.25 to 1582.25. 

 I tweeted earlier in the morning that I would look to this area for potential longs as I expect buyers the first time to initial support.  Although the back of the zone was penetrated & closed outside of the zone there was no short.  It would be illogical to continue taking shorts at a point where buyers usually show up.   

Buyers did materialize at the back of initial support & ES rotated back up to the 1586.50-1588.50.  This would be the 2nd touch of the zone and the strategy calls for taking only the highest odds first touch. Sellers stepped back in at this zone driving back down and through initial support to the 1576.75-1574.75 zone where selling shut off.  

While we had a 1000+ negative tick reading near the lows of the day it was simply too close to the end of the session to take a counter trade.  Taking counter trend trades at the end of the day, particularly when near or at highs or lows is simply a low odds affair.  Its stressful and can lead to big losses at the end of the day. Its simply not worth it.  

Today only generated one trade, a winning trade, but it avoided multiple counter trades that could have racked up losses.  Avoiding a losing trade is as valuable to me as having a winning trade. I hope everyone did well today.  More opportunities tomorrow.  

Notice: 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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