Warrior Trading Blog

Steve’s ES Bear Claw Scores +$3,175 | Steve’s Futures Pulse 173


Hey what’s up, everyone. Happy Thursday to you. Today was an exciting day because after a ho-hum day yesterday, where we made just $75, $300 in the gold, but we gave back $225 in the eMini S&P, we came rip roaring back to score $3175 on a short-side play in the eMini S&P. This trade emerged a little bit before Powell got in front of the podium, but we stuck to our technical guns, and even found an inflection point to add to our short position, which allowed us the chance to scale out along the way, as you’ll soon see in today’s extended recast. Enjoy the learning opportunity, and I look forward to meeting you back tomorrow morning for Friday’s session. So long…

Good morning Futures Warriors, trader Steve here. Well, right off the bat here we’re going to have some excitement. Just to get you caught up to speed here, those of you that were in the pre-stream here with me in the Futures Trading chatroom, we initiated a short position 30-02, and three quarters, which is just under that green demand line down here. Market pulled up and actually kind of topped out here, see on this bar at 30-06, and a quarter. We added the position at 30-05 and a half, which brought our cost average down to 30-04, approximately, and some change. We’re going to say 30-04, which is right about where we’re standing right now. We’re in a short position. Our stop’s up here at 30-07 and a quarter.

We’ll see. Paul’s talking. It’s going to obviously add to the volatility factor of the trade. I’m going to see if I can’t bring up my drawing tools. Give me just a moment here. … Hey, we’re in business. We can draw on our screen now. All right.

Here goes the break. There we go, 30-02, 30-02. There we go. We’re sliding through the long range bars. We survived some early volatility on the trade, looking good, looking good. Taking off half my trade early on right here. Okay, if we get just a smidge lower, waiting for the break. Little break, little further, there we go. …

30-02 and a half. I covered half my units. Now remember again, we initiated short positions at 30-02 and three quarters, which was right here on the initial break, added at 05 and a half, which brought our cost average right up here around 30-04, which is actually real close to where that POC level is. Okay, I scaled out of half the position here. Okay. We’re off to the races here. Okay, a little slide, a little bit lower. We’re going to run into some congestion as we approach that 3,000 mark. Okay, here we go. A little bearish on the market here, but we’re in a good spot here. We’re also breaking, look on that 30 minute timer, we’re now down below that 30-01 and three quarters. That’s just what I was looking for here, maybe some of the enthusiasm from yesterday is wearing off here in the marketplace.

We’re going to see what’s cooking. Here we go. We’re at the 3,000 mark, off to the races to the down side. Now watch this congestion zone, traders. It’s going to get fun. It’s going to get exciting, because you should be short with me right here, right now. I’m taking off six more units as we go right now, boom. Just took off 16 more units. I’m up $1700 just like that, by the way. $1725, to be exact, okay?

Still got six units left here now with 1500 and running right now. We’re up over $3,000. Make no mistake about it, okay? Still was a technical trade. This was not a trade off of [Powell 00:03:49]. It’s not like a Powell trade. This was a technical trade. I started to see the market breaking down below that 30-03 level, and that’s compliments of your TAZ market profile and this congestion zone we can see our TAZ market map, just like that. Again, this was a technical entry down below the demand zone. The market came up and I still trusted our levels. We had all kinds of technical highs up here. We had all kinds of supply areas. That’s those red horizontal lines on the chart. We added to the position up here. We’re feeling good about the trade. This is all about risk management right now.

I’m short just six units now left. I’ve closed out $1725 on the trade, and $1500 and running right now, okay? At this point, you could take a big deep breath. … You’re going to have a nice green trade here if you’ve been following my lead today, okay? Don’t forget now if you have added to the position, which I’ve made this mistake before early in my trading career, and even as early as like two weeks ago where I forget to adjust the stop loss quantity when I’ve scaled out. Okay. …

Right at that, about that 3,000 level here, just ahead of that, I’m looking to cover three more units. I did that just a moment ago. Here we go. Where’d I get that last cover here? It looks like I got 30-01 and a quarter here when it popped up just a second there. We’re bouncing off that 3,000 mark. Low of the bar over here. Let’s see where that comes in. 29 99 and a half, so market against the big psychological milestone for this market. Again, it could get ugly if we break below that 3,000; but you also got to clear that congestion zone if I zoom out just a little bit on the 10. See how you can see this back to back congestion zone? That’s compliments of your market profile. Now remember, that’s where we take market map, TAZ market map. We take volume. We flip it sideways so we actually have a way we can look at these price bars over here. I’m down to three units here now. …

Looking good, looking good in the neighborhood. Okay, 23-62 I’ve closed out. … Having some fun today. … There you go. This is what we’re … what I’m holding here right now. You can see realized, 23-62 and some change. I’m short just three units here now, so basically the vast majority of my risk is off on this trade. Still got about $600 in running here, so, so far, so good. Okay, we’re going to manage this. It’s going to be a green trade. I’m going to show you where to be moving that stop here now in just a second, okay?

Time to move that stop down now. Okay, we’re going to move it down from that 30-07 and a quarter. Remember, my cost average still right around this 30-04 level, okay? Because of the add, so we get to pull that stop down. We’re going to pull that stop down a good bit here, bring it down to 30-02 and a quarter. Now, it’s going to be just back inside. I’m looking at the 30 minute chart over here. See that green demand level? So if we come back inside that level, 30-02 and a quarter, that’s where we’re going to get out of the trade. So slide, if you’re using your chart trading stop, we basically took all of the risk off this trade. It’s a free trade for us. We’ve closed out $2300 in realized profit already. We’ve got about $800 and running on my final three units right now. We’re going to have ourself a good day today.

Hope you guys don’t mind. Is that okay? Anybody okay with having a good day today? All right. … This sure beats making $75 day we had yesterday. Remember, yesterday was … We made $300 in one market. Lost $225 in the other for a whopping $75. Yee-yaw. This is the nature of trading, though. It’s like one day you make $3,000, the next day you make $75. The other day you may lose money. It’s just the nature of the beast, okay? You’re not signing up for your 1.5% CD, certificate of deposit return that your local bank wants you to sign up for and lose to inflation every year. I mean, if you want to.

You want me to tell you the way to be the best customer at the bank? If anybody in attendance here is a banker, my apologies, because you already know this, but I’m not supposed to say this. Shh, Steve, if everybody starts listening, they might stop leaving too much money in their bank accounts here.

So the reason why you get free suckers, free coffee, and a nice little lobby when you walk into the bank is because if you keep too much money sitting in just a bank account, like a savings account, tied up in a certificate of deposit with just a smidge of interest you’re going to get, you’re going to lose to inflation every year. The inflationary rate is higher than at least any of the certificate of deposits I’ve seen out there advertised. You lose to inflation, which means in a year, or in 18 months, or 24 months, whatever length of time you decide to say, ‘Hey, here’s my money. I won’t touch it. It’s yours to run your bank, for your bank traders to trade my money; because I know you don’t keep every penny in that vault.’ They’re not required to, only a small percentage actually sits in that vault, folks.

Isn’t that crazy? But people feel it’s safe. I just want to get my one and a half percent. That’s all I want. I just want to make a little smidge to say that I made money on keeping too much at the bank. Meanwhile, traders, we say the heck with that. We’ll keep enough in there for emergencies, keep your six to 12 months of earnings in the bank for emergencies. Things happen. Someone gets sick, a big bill, a car repair, all that good stuff. But your job as a day trader, you know this, Ross talks about this all the time. This is the activity of making money. So it’s intense. It is.

We spend a very conscious hour or two working really hard at these charts. We make our money and then we get out of the account. Then you can put it in more conservative stuff. If you want to do long term investing, that’s all good stuff. You should continue to build a nice modern day portfolio based around modern day portfolio theory. Get your stocks, your bonds, your options, your dividend, your recurring dividend investments; but you make your money to fuel those investments through your day trading. That’s what it’s all about.

Okay, you can see the market’s down, down below 3,000. We’re up almost $1,000 still in running also on that final three units. I’ll show you that here. You can see that right here. … Okay, about 900 bucks on that. So we are over, in total, up over 3,000 bucks so far. Here we go.

We’re going to run into some congestion here. You can see this right here, all this congestion down below here. That’s going to prompt me to be fairly aggressive. We’re going to get this thing all the way down to just my runner. That’s a function of, I want to show you why. It’s not randomness what I’m doing here. I’m a market profile trader. I’m the authority of market profile. Okay, I’ll stop a little short of that, but I do got some pretty cool tools that work for market profile traders.

We’re on Bloomberg, you know that. We’re on 12 industry leading platforms. We’re up for nomination for best data analysis tool for the Benzinga Fintech Awards. Be sure you vote for TAZ. I’m covering two more units right here. Boom, just covered two more units. Now closed out 28-87 on the trade. You can see that right here. 275 and running still. I’m down to just my final unit here on the eMini S&P. See if we can’t get over 3,000, and maybe this thing will make a run for us. We’ll find out soon enough. We’ve basically alleviated all the risk nearly on this trade.

Down to a final unit, up about $300 on that one as it stands right now. Let’s be patient. I’ll be recapping this … and missed the trading here. I’m giving you these verbal alerts live. … I’ll give you a recap here once we adjourn this trade.

So see all this congestion here? Again, this is market profile where we take volume, which just sits down here and gives us a liquidity measure; but doesn’t give us any reference to price. We flip it sideways so we can see right here these explicit areas where the volume is aggregating. Okay, you can see the markets have a tough time breaking through this congestion zone. Look right here. It’s swinging a u-turn right on that congestion zone. If you don’t use market profile, you don’t even see this. Right? Remember how it looks if you don’t use market profile? Let me bring up the eMini S&P here. Okay, this is a 30 minute chart on both time horizons. Look, here’s your regular chart over here on the left; before, we’ll call that. Here’s your volume all by itself.

Remember, big spike in volume. Well, that’s all fine and dandy. Cool. A lot of people have traded. That’s all that tells me in a regular volume chart here. Okay, so at this bar right here, it’s that second bar, great. Cool. There was a lot of activity, but it doesn’t tell me anything about where all the activity is. That’s what market profile and TAZ market map do for you. That’s the key. That’s the key. … There we go, back to my favorite chart here.

So we got the stop still on that final unit at 30-02 and a quarter. So again, if we move back inside on that 30 minute time horizon right here, and we’re getting close, but we still got a little buffer. 30-02 and a quarter is right here is our stop. If we get stopped out there, big deal. We’re going to add a little to the green there as well.

I want to be very clear with you. Although Paul was speaking a little bit after we put on this trade, it was actually 8:43 a.m. Chicago time, we initiated the first part of the position at 30-02 and three quarters. Then, we added about 10 minutes later, actually to be exact, let me tell you here. It was we added to that position at 30-05 and a half at 8:45. It was like two minutes later, 8:43 and 27 seconds in that wheelhouse, and then about two minutes later, we added; because market popped up right away. We initiated the position. You guys thought I was crazy. You’re like oh gosh, Powell’s talking. It was not a trade on Powell. I don’t trade guessing what somebody’s going to say at a podium. That’s ridiculous. I don’t have that power.

I got to be honest with you, I don’t want that power. I don’t want to be in that guessing game wondering what somebody’s going to say at the podium. There’s a lot of … Remember, when it comes to technical trading, you have to … If you’re a true technical trader, or primary technical trader where you’re 90% technical, but you still have awareness of fundamentals, I knew Powell’s talking 15 minutes later; but it was a technical set-up. Okay, so I’m not going to let somebody at the podium stop me from taking a good technical trade. That’s the reality. That’s all there is to it. …

So we’re going to see if this thing will run for us here. Basically, we’re going to see if this thing’s going to have the ability to break through this congestion. I’m not so sure if it is. I’m going to take a peek at the three minute chart now over here. How many of you are on that short side with me here? If you were, tell me how you’re doing. Should be making some money. Yee-haw. Type in the chat room. If you entered the short position with me this morning, and you were able to do the add, … we’re been working a whopping, what? … Less than 40 minutes here today. I’m up over $3,000.

Yeah, Brett. That’s right. For those of you new here, congratulations to … That’ll be Steve’s day. The 40 minute work day. … I’m working on some pretty cool stuff that you guys here at Warrior Trading are going to learn about, which is how to dedicate 59 minutes or less to the markets. Make a nice handsome side hustle, and then enjoy the rest of your day, each and every day. 59 minutes or less, okay? Coming soon to here at Warrior Trading. Okay, stay tuned I’m super excited.

Cool, Richard made $275. AJ made $525. Tim made $100 a contract. Nice work. You guys are quick on the grab. Who else made money on the short side with me on the eMini S&P? Here’s your three minute chart here. Why do I go to a three minute chart? You see up here it says three. Here’s your quote on the S&P, by the way. Because I’m making the analysis more sensitive. I’m basically as this market continues to drop, it’s going to have a tough time breaking through this congestion; but if it does, look at how it opens up here. The thing could be at 29-80 if it can break all the way down below here. This thing could get real ugly, real quick. Okay, right now we’re just dealing with a … I talked about it yesterday. You know how the market kind of popped up, this euphoric … the masses are super excited to be over 3,000. I almost want to personally will it. I mean who doesn’t want to make a new thousand milestone in the stock indexes. I do, I do. The world does, of course.

But then you get up there at the top of Mount Everest, right? You go, ‘Oh, gosh. Do we really belong up here?’ I mean is the world really fixed in a perfect place? Is there not tensions in the Middle East? Is there not still trade wars that are likely to continue to intensify? Of course there are. Yeah, things are in maybe an okay spot now, but man, the world’s got a lot of problems still. That’s what makes markets move. …

[singing 00:17:30] …

The Longest Time,’ Billy Joel. He snuck into my playlist somehow. I told you, I got about 100 songs. When I put my … I’m listening to music right now. I mean, it’s kind of a weird thing. I trade. I talk to you guys, tell you what I’m doing. Look at that market break, and then I listen to music as we go. I have the most bizarre playlist. My wife will tell you.

She’s like, “I can’t figure out what kind of music kind of keeps you in your mojo.” It’s not like a steady stream of light jazz, or like a trickling water fall. It’s like Billy Joel. Sometimes there’s like some random dance music in there. There’ll be some really good reggae songs from Bob Marley mixed in there. I like country as well. I’m a country music lover. …

Last December when … Me and my wife flew out to Las Vegas for the Warrior Trading Christmas party. That’s right, of course. We’re Warrior Trading. Of course that’s where we have our week long Christmas party. It’s like a Christmas getaway, right? Some companies have a one hour dinner. They give out a few awards, and that’s it. Have a great year. Warrior Trading, we go out for five days to Las Vegas. How cool is that?

So we went out there. It’s a cool story for a country music lover. We land there at the airport in Las Vegas. Unknown to us, George Strait’s hosting a concert in three hours from the time we landed. It didn’t take us long to figure that out. We saw all the big belt buckles, and the spurs, and the big hats. We’re like, ‘Wait a minute, there’s a … Someone’s probably playing.’ With three hours notice before showtime, I scored myself … I think we got row four, just in the nick of time. That was a good time. I got to tell you. So if you like the legend, over 50 number one hits. He’s old school country. Not that new stuff that you can’t even know if it’s country or pop, or Britney Spears country.

Here we go. We’re going to … we’re retesting this congestion zone right here. I still got one unit, kind of like a just for fun unit right now. It’s up 350 on the trade. Now remember, I’ve closed out 28-87 so far on the trade. You can see it right here. See, about 23. I’ve sold 24. See that? There you go. You get the idea. …

Janice, nice work. You made yourself a thousand bucks, almost 1100 bucks. Nice job. Tamara, 175, that’s good. Nice. Good job. Remember, what you make’s going to be contingent on lot sizing. Some of you probably are doing the micros, symbol MESU9, which is great; the 1/10th contract. It’s a great way to cut the risk down. The original risk on this trade had 225, so it had four and a half point risk. Okay, so it was kind of right in our wheelhouse of most of the trades that we’re looking for on full size contracts going to be about between one and maybe $500 per contract. But we’ve talked about this lately how you can trim the risk by lot sizing, by trading smaller contracts, those like the micros, or the minis.

There’s different ways you can mitigate the risk. It’s not like an all or nothing decision for you guys. … Well guys, we’re having a tough time breaking through this congestion zone right here. My nine year old is an aspiring golfer. He started playing golf three years ago. My goodness, if he’s going to not give Tiger Woods a run for his money some day. I have not done my job. I think I’m going to go play a round of golf with him. Follow me on social media. I’m going to play a round of golf here today after making 3,000 bucks in well, about 45 minutes, let’s say, okay?

I’m going to cover this final unit here. My work is done. Covered the last unit at, for your record, … 29-99 and three quarters. The reason is we’re having a tough time breaking through the congestion. Albeit I could hang in there on this single unit for the down side. The fact of the matter is, me having the rest of the day to go play a round of golf, there’s a thing called market in the park I’m going to be doing a little later today, which is a great thing where all the families get together in the park. All the vendors come out that are local businesses, and serve food, and beverages, and some good local music. I’m going to gear up for that. My job is done here. Looks like it all shook out here at 31-75. I am done. There we go. 31-75 today. I’m off to the golf course.

I told you there’s always a valuable trading lesson inside these videos. That’s why now’s the time to subscribe so you keep getting alerts every time I post a new video, as well as the other Warrior Trading mentors. Until the next video, happy learning.