Warrior Trading Blog

A Monster Win in the Emini SP | Steve’s Futures Pulse 143


I’m sorry, but I can’t get the big smile off my face! And for good reason. It’s T.G.I. Futures Day. We just closed out our eighth green day and perfect for the month of May, in the futures trading chatroom. Made three trades today live in the room. The first was the lean hogs. The second was the Canadian dollar, and last but not least, and our big home run, batter up, was the E-mini S & P. I’m going to show you why we made the trades we made, how we manage risk, why we decided to call it quits on the lean hogs where we did, and how we reeled up the opportunity in the E-mini S & P, which is still in play right now and boy, oh boy, this runner is a good one. Look over my shoulder in today’s Futures Pulse.

Hey, what’s up? I’m up here in the top right of the screen here. Before we get too far along, look over to the left here. This is, as you can see, I still have a single unit in the E-mini S & P, and well, at the time of this recording, it’s still running over $2000 in open P & L. That’s awesome, on top of 3900 that we already closed out. We’re going to get to that in just a moment. You could see, this is basically a little screenshot there of my positions from today. And we’re going to dive into them one by one, starting with the Canadian dollar, okay?

So Canadian dollar here today, we actually took a nice short position on this one. We saw on the 10-minute timeframe here that there was a huge run-up in that market. This is what I like to call a slip-and-slide bar. In the futures trading chatroom, I say that these bars oftentimes give birth to the market sliding back through, like a kid in the summertime on a slip and slide, and so that’s exactly what we did. We looked for a short position, and we initiated that and 74, 65, right there where I’ve circled. We initially put our stock up here, okay? Which came with a 17 point risk. It was right up above that level there, so $170 per contract risk on this one. But we got the move we were looking for. We ended up seeing the market come on down, down, down, down, and then we covered two of the three positions, and then the last one, for what ended up being, as you can see, $360 on the trade.

So nice little victory to kind of kick of the morning, but I want to talk to you about lean hogs, okay? Because we did have a trade there that actually I thought was going to be a good trade, but we needed to manage risk and call it quits on that, so let me bring up the lean hogs here for you, and it’s symbol HEM9. Here you go. Okay? Ten-minute chart timeframe, as well, and you can see, we had kind of a similar pattern as we saw in the other trade in the Canadian dollar, market had a run-up the day before, leading up to the trade, and then we started to see the market get comfortable down below that demand zone. That’s that green horizontal line complements of the TAS boxes indicator. When the market does start to break in that direction, with generally a high degree of probability, it’s wise to side with the bears. But market volatility got the best of us on this one.

So we initiated a short position down here, 88, 67 right there, and then we got stopped out up here as we emerged above that technical high because this is where we put our stop, so as the market grinded higher here, we got stopped out of the trade. Now, it was a $320 risk per contract, but I had six of them, so that’s where you can see I amassed a 1920 in the wrong column. Okay. But, again, we stuck with the trade, and you know, I think a lot of traders, at this point in time, if you have kind of a loser like that, it’s easy to get down, get pessimistic, fatalist, you know, throw your computer out the window.

If you’re trading within your risk tolerance, and you should, always, on every trade, it’s really nothing to take personally. It’s something for you to say, “Hey, markets are just being markets. There’s no guarantees that just because there’s a great technical set-up that most of the time yields a positive result, that every single time.” Okay? Guarantees don’t exist in trading. Certainties don’t exist in trading. Only probabilities, which always still means even great set-ups can end up being losing trades.

We’re stopped out of that one, and the next trade was the E-mini S & P. Now, this is the one I’m going to spend a little bit of time on here because it was a really good trade for traders to also be looking at the micro E-mini S & P futures as well, which many members did in the room. So let me tell you about how this trade went down. It was a fairly comprehensive strategy that basically came to life just as I had wanted. Look, I’m going to stop short of saying I have any control over where these markets go, but sometimes, you initiate a trade, and exactly what you foreshadow happening does happen, and then you’re handsomely rewarded for that. Okay? So let’s take a look here at the E-mini S & P, and you can still see, I have some running profits, and that’s on a single unit by the way, okay?

Let’s talk about how this trade came to life here today. This is a grand slam win. We ended up seeing the market have that huge sell-off. We didn’t participate in the short side, albeit you can see there was certainly an opportunity if we pulled the trigger on the short side, the analytics base and market profile said it was a sale way up there in that 2850 zone, but we did not participate in that. We kind of at that time, those in the room, went kind of like, “Ah, shucks.” Everyone was kind of like, “Boy, we missed the nice opportunity there.” I said, “Wait, you guys. Just wait. Be patient. We’re going to wait for new levels.”

And we did just that. These levels formed, okay? So these value areas, TAS boxes indicator, formed down here, and then we started to see this area amass volume accumulation, okay? This is market profile, where we take volume, traditional volume down at the bottom, and we flip it sideways and put it behind our price bars for one simple reason, and that’s so we can see, on a relative basis, where the volume is greatest. Okay? So you can see right here is a volume aggregation, and then eventually here amassed another one, but in between here, where I’ve circled, is a volume gap or void. And time and time again, we’ll see markets move fast and vertically through those zones, so we wanted to be a part of that.

So long story short, let me fast-forward. I’m a little long-winded today. I’m sorry. I’m excited. But we initiate a long position right over here, where I’ve circled at 2838, six of them, okay? Markets started grinding down, and you might say, or you might be predisposed to be all bummed out about that, but I viewed it as an opportunity. I still believed in the trade. Added six units at 33 and three-quarters, right here. And then when the market came down even a little bit further, right here, I added as well.

Let’s talk about the risk, okay? Because as soon as I entered, right out of the gates, I put my stock down below here at 28, I’m going to do my best to write some chicken scratches here … 28, 25 and a, come on, and a half. Okay? I wanted to work a wider stop. The market was volatile, and I wanted to work a nice, wide stop here with intent to move up the stop once we had a little head-start on the trade. So we needed every bit of that as the market did come down here, and at that point, we amassed essentially an 18 lot into the trade.

Many in the room, obviously, were not trading that lot size, and many were actually doing micros, which was a fantastic opportunity to deploy the growing volume in the micro, E-mini S & P futures and still participate in this trade, and so long story short, you can see what happened. The market did hold on that demand zone. We started seeing a turn-around down here in our TAS navigator indicator, when you start getting that upward-pointing trajectory like that, that’s bullish. So we started feeling really good about the trade, and then the market started coming on up here, and we started scaling out multiple times right here. Right here, right here, and three different times we scaled out between basically 37 and three-quarters and 40. Okay?

What we did, and it was wise, and it’s a fairly common part of my strategy is, I kept that final unit in play, and that’s why you still see that I have this number rising here as the market’s pushing on the highs here for our session and making quite an impressive comeback, and in fact, coming all the way back. As we see it right now, you can see, this market’s come all the way back to unchanged, and it’s a heck of a trade, so in this zone right here, this is where you see with the lot sizing that I shared with you, we closed out that. That’s $3900. But we kept that one final unit in play, again. Just one single contract, of which you only needed that $500 margin for day trade. We do it for that reason.

The big break, follow-through. I stop on this particular one is … Let me just see where it is here, if I can bring up my board here real quick. Because that moved it multiple times. Right at 55 and a half right now, and in fact, I want to move that up here, just actually down below the low. I’m doing this actually for you here as well, down below the 68 and a quarter mode. So I’m going to move it to 67 and a half. So again, I’m locking in at the time of this recording, a real nice gain on that, regardless of where the market goes from here. It’s going to be a fantastic way to finish off the week, and keep that green streak alive.

Anyways, I hope you understand what we’re doing here at the futures trading chatroom. I love that you’re watching and learning and enjoying Market Profile. Obviously, the most intimate, best way to continue that learning journey, you can get the very most out of what I’m teaching in the futures trading chatroom is to get in the futures trading chatroom, and I invite you to do just that this weekend so you can join me back on Monday morning to see if I keep the green streak alive for a ninth consecutive trading session.

So long everybody, until I meet you back at the market soon, trade well.

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