Sunday, May 5, 2013


ES had a significant gap above 1600 & pretty much left me with nothing to do.  As A trader I have 3 choices  in a gap like this. 1) go long right off the open & risk an attempt for any type of gap fill will stop me out.   2) fade the gap.  This is just a really bad idea.  There is nothing to lean against & no way to know when the buying would shut off.  3)  Do nothing without a proper set up.  I went with 3.  My first resistance was at 1612-1614.  This was based on my own calculations and I had no prior trading levels to work with.  The level turned out to be almost perfect.  The HOD was 1614.25. Still, the high lining up with my level i will attribute to luck.   The WHITE ZONE was 1604.50-1602.50 meaning buyers were in control off the open.  It also means i pass on shorts setups in this strategy.

No trade set up and no money was lost.  Avoiding a losing trade is as valuable to me as a winning trade.   My focus is purely on the highest odds trade.  If I don't get my set up I just do nothing.  The only thing I could have done Friday was guess.  My guesses are 50% & I can not make money at that rate. So to wrap it up,  there were no trades, I lost no money and I am looking forward to next week.  Boring but profitable. The need to produce at any risk on a daily basis is the road to ruin for most traders.  Knowing your set up will come will bring you riches.

“The good fighters of old first put themselves beyond the possibility of defeat, and then waited for an opportunity of defeating the enemy.” 
― Sun TzuThe Art of War

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.

No comments:

Post a Comment