ES had another fantastic trading range today & provided excellent trade opportunities. The trade plan: Today the plan calls to focus on the middle to back of the trade zones on first touch. When below the WHITE ZONE the focus is on the short side & when above the focus is on the long side. The plan is what guides me through the day & essentially sets up the highest odds trades. That being said, price action plays a large role in fine tuning an entry or exit.
1) ES opened at 1648, below the WHITE ZONE OF 1650-1652. My trade plan calls for a contra trade the first move up into the WHITE ZONE when opening below & 1650 offered excellent trade location & a potential 3 point rotation lower. My trade model is predicated on the idea of taking two point profits & this was easily achieved. Remember, this is a business & all you need to build this business is one good trade.
2) 1646-1648 was PRE-MARKET SUPPORT & responsive buys came into the market and drove ES through the WHITE ZONE & to the back of the 1654-1656.50 Resistance Zone. The second time into any zone carries lower odds for a counter rotation & is the reason why I caution that second touch is a more advanced trade. In addition, buyers were now in control meaning that long trades on pullbacks now had the edge in term of probability. The back of the 1654-1656 support zone (prior resistance becomes support once broken) provided good trade location and offered an easy 2 point scale/ target with a potential for a 6.5 point trade with the rotation up to the 1659.25-1661.25 Initial Resistance Zone. (3)
When the market trades into Initial Resistance/Support I expect a larger contra rotation that normal & that is exactly what happened. Unfortunately that setup came close to the last hour near the high of the day & above the 1st hour high. My rules do not permit a short in that scenario; so I took a pass. Those who did take the short had a nice payday.
Again, my focus & the focus of this blog is to highlight the highest odds trades generated by my chart. The location of the zones themselves is an edge. It expect a pause in the market when these levels are reached. Its not a system, its part of a larger strategy of taking high odds trades and exiting and high probability targets. for me its all about stacking chips day in day out. If I can get two high odds trades a day for 2 points each I am pleased. Wash Rinse Repeat.
“He who is prudent and lies in wait for an enemy who is not, will be victorious.”
― Sun Tzu, The Art of War
― Sun Tzu, The Art of War
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