I haven't seen any good thread started lately on trading the ES. I'd like to start one. Perhaps it'll die quickly, but I will add to it every now and then. Probably not everyday, but here and there when I'm in the mood.
This contract is extremely difficult to trade and only the best pros can beat it. I'd like to provide a few tips and tricks to trading it successfully. There's no magic formula that I'm providing. Just simple observations that I've learned throughout the years. There will be no indicators in here. I'll talk VERY rarely on volume, if at all. I'll have some moving averages on my charts and thats about it.
The first point I'd like to make, and I know its beaten to death on ET, is risk to reward ratio. I very rarely make an ES trade if I can't get at least a 1.5 : 1 rr ratio. In simple speak, if I'm risking 2 points, my minimum target is 3 points. But most of my trades are at least 2:1. This means I'm not trading very much throughout the trading day. Some days I won't trade the ES at all.
I try to take advantage of the predictability of the big trading algorythms from large institutions. Price patterns tend to repeat over and over again. Fear, uncertainty, and greed drive these obviously. But at certain points in time with certain patterns developing, price is very predicable. Successful traders know that these points will not happen often, sometimes not even every day with the same instrument, thus the need to trade multiple instruments. I'd like to outline a few ways to take advantage of the ES in this manner.
The only 4 setups / patterns that I will trade:
1) Trends
2) Reversals
3) Price Pattern failures (when a certain pattern develops and fails to develop in the way thats expected, there's a good trade here)
4) Buying Support off the open.
I'll go into all these soon. I'll post charts and whatnot and go into some detail. One thing I do not trade is chop. Consolidation days and chop are usuall a waste of my time. They're normally a result of either strong gaps or after a strong trend where the algo's are all out of wack trying to compete against themselves to position themselves for the next move. I have no interest in trading that crap. Normally, there's not a trade with a good enough risk to reward ratio worth my time.
Stay tuned for the first chart coming soon....
This contract is extremely difficult to trade and only the best pros can beat it. I'd like to provide a few tips and tricks to trading it successfully. There's no magic formula that I'm providing. Just simple observations that I've learned throughout the years. There will be no indicators in here. I'll talk VERY rarely on volume, if at all. I'll have some moving averages on my charts and thats about it.
The first point I'd like to make, and I know its beaten to death on ET, is risk to reward ratio. I very rarely make an ES trade if I can't get at least a 1.5 : 1 rr ratio. In simple speak, if I'm risking 2 points, my minimum target is 3 points. But most of my trades are at least 2:1. This means I'm not trading very much throughout the trading day. Some days I won't trade the ES at all.
I try to take advantage of the predictability of the big trading algorythms from large institutions. Price patterns tend to repeat over and over again. Fear, uncertainty, and greed drive these obviously. But at certain points in time with certain patterns developing, price is very predicable. Successful traders know that these points will not happen often, sometimes not even every day with the same instrument, thus the need to trade multiple instruments. I'd like to outline a few ways to take advantage of the ES in this manner.
The only 4 setups / patterns that I will trade:
1) Trends
2) Reversals
3) Price Pattern failures (when a certain pattern develops and fails to develop in the way thats expected, there's a good trade here)
4) Buying Support off the open.
I'll go into all these soon. I'll post charts and whatnot and go into some detail. One thing I do not trade is chop. Consolidation days and chop are usuall a waste of my time. They're normally a result of either strong gaps or after a strong trend where the algo's are all out of wack trying to compete against themselves to position themselves for the next move. I have no interest in trading that crap. Normally, there's not a trade with a good enough risk to reward ratio worth my time.
Stay tuned for the first chart coming soon....
