ES TRADE REVIEW FOR 05-28-2013

1) ES gapped above the WHITE ZONE OF 1662.50-1664.50 opening at 1665.50 & driving to the back fo the 1666-1668 resistance zone.  This was a significant gap above Fridays close of 1650.75.  The WHITE ZONE WAS critical here.  It simply told me I did not have to worry about the gap fill as long as we held the WHITE ZONE.  No need to guess,  I knew buyers were in control.  As the focus of this blog is on the highest odds trades we will focus there.  ES was unable to drive into the WHITE ZONE for the first 10 minutes and there were no negative NYSE ticks.  Strength everywhere.  The trade plan called for focusing on trades setting up in the back of the zone.  The challenging part of trading is that occasionally you have to stray from the plan.  The first dip into the WHITE ZONE provided the best position to get long.  My targets is usually two points but in this case I was looking for a push to 1672 given the opening strength.  For those focused on simply staying consistent & growing their account; two points were easily achieved.

2) Responsive buyers were able to push ES out of the WHITE ZONE & past the 1666-1668 zone into Initial Resistance of 1670-1672.  I expect Responsive Sellers at Initial Resistance & for less aggressive traders with trailers this was an excellent point to exit longs. Once Initial Resistance is hit I am much more cautious on my long entries as I expect a larger counter rotation from these points.    Responsive sellers did step in slightly above the zone and pushed ES back down into the WHITE ZONE. 

3) The push back into the WHITE ZONE was the 2nd push down into the zone & called for caution.  In addition, heading into NY lunch can prove to be  a difficult time to pull off  a consistent trade.  Consistency is the key to growing your account.  ES Proceeded to chop from top to the bottom of the WHITE ZONE for the better part of 1.5 hours.  Its a great time of day to donate money to the market.  The best one can do is guess which way it will break.  I would be shocked if someone could guess right 90% of the time.  anything less than a 80% trade from a day trading standpoint makes you a loser by my numbers.  Hard to believe,  but that is what my data shows.  

4) ES resolved the chop party by exiting to the down side.  The point of the WHITE ZONE?  To keep me from getting run over in a directional move.  Traders for some reason think its easy to picking off counter moves in a directional move is easy.  I assure you its not.  Its very hard.  It is easiest to simply wait till the market gives you a nice counter trend move into resistance. 

5)  A picture perfect example of that came in the retrace to teh 1658.50-1660.50 resistance zone. ( Prior support = resistance). Responsive traders pushed ES right to ES to 1660.50.  Outside of being the last hour,  the set up was great.  Did I trade it? No, last hour does not support me taking new positions BUT,  the setup was otherwise perfect and had it occurred anywhere else I would have taken the trade.  Traders should commit the pattern to memory so you can act on it next time.  Bottom Line,  The WHITE ZONE simplifies trading decisions.  If you have traded for any period of time you have discovered how hard it is to stack the chips.  Anything you can do as a trader to get on the right side with less effort is a big EDGE.  Are there more trades here?  Yes.  Many many trades from swings to option setups.  It has massive potential.  But my charts single best feature is that if used correctly, it allows me to simply put a few points a day into my trading account.  1 good trade a day is all I need to grow my account.  The trade out of the WHITE ZONE is my number one trade.  

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.