ES price action scalping [5min]

Owaco said:
Too bad you missed the following 1-2-3 reversal setup on the break of the 4072.75 pivot after the test of the low; would have given 17 ticks profit.
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Years ago I would trade all day but after many years I accepted that it was a strong contributing factor in over trading. Nowadays, to prevent over trading I only trade the first hour or two max after open. It has also helped from giving gains back later in the day. There's plenty of days where after the first winning setup, the following setups are losing trades. I think this is a reason why 1-2-3 pattern often fails in back tests.

My overall goal is a simple entry/exit system that on average works across all day types. So far this is the best performing. Being able to execute it simply on my phone and typically within 1 hour per day is a big plus.
 
6/1/2021
  • +$150 (2 ES contracts)
  • Waited for the 1-2-3 reversal pattern and let the automated stop loss trail exit for profit
It's been awhile since I last updated, because most of last week there were no entry signals. Many of the days trended in a single direction at open and did not have any 1-2-3 pullback reversals. I've been exploring other entries to take advantage of these days. The main idea is to use the direction of the first 5 minute formed bar after open as the direction of the trend, and only if that bar is a successful breakout or failed breakout of a previous support/resistance.

For today's trade:

upload_2021-6-1_16-25-59.png




Potential trade 6/1
  • Bars 0 and 1 at open were failed breakouts, so place sell stop limit 1 tick below previous bar, and stop loss 1 tick above it.
upload_2021-6-1_16-39-54.png


5/31

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5/28
  • No trade because the entire overnight was in a small range.
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5/27
  • No trade because the bars at open were not breakout bars but continuation of a breakout from earlier.
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6/2/2021
  • +$250, +10 ticks, 2 contracts
  • Quick and easy 1-2-3 pattern today.
  • Feels great being done within the first 30 minutes of the day
upload_2021-6-2_8-46-45.png
 
Ninja Mobile Trader VPS said:
6/2/2021
  • +$250, +10 ticks, 2 contracts
  • Quick and easy 1-2-3 pattern today.
  • Feels great being done within the first 30 minutes of the day
View attachment 259999
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Great trade! Three questions if you don't mind.

Where does your red "resistance" zone come from? Is it the series of lower highs from yesterday at 4210, 4207.75 and 4206.75?

Your support zone seems to be simply 2 swing lows on the 5 minute (albeit the 2nd one is a quick rejection). Or are you perhaps also taking into account the VWAP as well?

And do you only take your 1-2-3 setup if the short is at a resistance zone and only if a long would be at support?
 
NoahA said:
Great trade! Three questions if you don't mind.

Where does your red "resistance" zone come from? Is it the series of lower highs from yesterday at 4210, 4207.75 and 4206.75?

Your support zone seems to be simply 2 swing lows on the 5 minute (albeit the 2nd one is a quick rejection). Or are you perhaps also taking into account the VWAP as well?

And do you only take your 1-2-3 setup if the short is at a resistance zone and only if a long would be at support?
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Yes it was from the series of lower highs that you mentioned. The red and green zones are automatically drawn by the indicator and I use them as quick visual support/resistance. The opacity decreases when a zone is broken.

upload_2021-6-2_9-23-45.png


Your support zone seems to be simply 2 swing lows on the 5 minute (albeit the 2nd one is a quick rejection). Or are you perhaps also taking into account the VWAP as well?
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It is being drawn solely based on the 1st swing at 5:20am CT. VWAP is not used in the code. The zones are automatically drawn based on comparing how the bars open, close, high, and low relative to each other.

And do you only take your 1-2-3 setup if the short is at a resistance zone and only if a long would be at support?
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It's not a hard rule for me, but it just ends up more often than not that a reversal occurs around these zones.
 
NoahA said:
Excellent replies, thanks! So do any take any 123 setup on the 5 minute chart if you're around, or do you have some other filter?
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I try to think of it within the context of different day types. The hard rules are:
  1. No trades before open. Only entries after 8:30am CT
  2. Stop after 1 winner, or 2 consecutive losers
  3. The closer the trade is to open, the better because price can often move across a large range during the opening volatility. Stop after 1-2 hours if no setups.
The 123 pattern does not work across all days and all hours. Running it 24/7 in a backtest shows unprofitable results. By adding those 3 rules and occasionally using discretion from past experience, the results have been very strong.

For example, a day like 5/24 was a strong accumulation up day. After the 1st hour, I just shutdown for the rest of the day knowing that any 123 setup would likely be very weak and stopped out.

The best days for 123 are High Volatility chop, V-reversal (where reversal happens between 30-60min of open) and Parabolic Pump and Dump.

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6/3/2021
  • +$550 (+22 ticks, 2 contracts)
  • Very happy with the results of the first day trading the new method
  • Method: use the direction of the first 5 minute bar after open as the direction of the entry trade, and only if that bar is a successful breakout or failed breakout of a previous support/resistance
  • Entry is a buy/sell stop limit 1 tick above/below the 1st 5min bar
upload_2021-6-3_13-2-0.png


 
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