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Not a single loosing trade so far!
Yesterday's Forecast and Recap
Yesterday's Forecast:
Before Gap - Today's market is very similar to yesterday. The green sections of Table-1 and Table-2 are the desired zones to trade. The common desired zones are O-C zone for short (1034 to 1026.50) and C-L zone for long (1026.50 to 1023).
Additional Comment - After two days of extreme sell offs, market may be due for a correction. So even though the numbers are good for going short in certain zones, I will be cautious because of this additional factor and may take profit before reaching the full target.
profit was about 20 points. But I played extremely conservative and only made a couple of points.
Yesterday's Recap:
ES opened at 1026.25, one tick below the close of prior day, almost right on the nose. So there was no gap to lead to any trades. However, at 10:50, right after NYSE ticks made a new low, I waited for a retraction with ticks at the higher level, went short at 1012.25 and targeted s scalp profit of 2 points. It reached my target in 4 minutes.
Today's Forecast Summary:
Before Gap - According to the modeling I use for market, there is not much data to be able to calculate probabilities based on the current market structure. However, in a case the market opens above the high of yesterday (i.e.1029.75), the timing data suggests a win rate of 67% with a profit factor of 2.32. This is not
one of the top setups, but I will trade it for smaller targets.
Gap trading usually works best when market is consolidating in a range. The current market is not the ideal one for these types of trade.
one of the top setups, but I will trade it for smaller targets.
Gap trading usually works best when market is consolidating in a range. The current market is not the ideal one for these types of trade.
After Gap - No trade for today.
Today's Data:
ES pivot points:
| R3 | 1056.00 |
| Fib 2 | 1044.50 |
| Day 2 Hi | 1043.75 |
| R2 | 1043.00 |
| Fib 1 | 1036.25 |
| R1 | 1032.00 |
| High | 1029.75 |
| Open | 1026.25 |
| Day 2 Low | 1023.00 |
| Close | 1021.75 |
| Pivot | 1019.25 |
| S1 | 1008.50 |
| Low | 1006.00 |
| Fib 1 | 999.50 |
| S2 | 995.50 |
| Fib 2 | 991.25 |
| S3 | 984.75 |
Table - 1 Gap Fade Probabilities (based on Market Structure)
Profit Target = Gap Close, Stop = 8.5 points.
| Opening Zone | H | HC | CO | OL | L | All | All | |
| Short | Short | Long | Long | Long | Longs | Shorts | ||
| PF | 0.91 | 1.43 | 100.00 | 1.98 | 100.00 | 2.12 | 1.93 | |
| PCT Prof | 50% | 67% | 100% | 67% | 100% | 84% | 78% | |
| Avg Loss | $275 | $288 | $0 | $250 | $0 | $488 | $349 | |
| Net Loss | $275 | $288 | $0 | $500 | $0 | $9,763 | $12,913 | |
| Loose | 1 | 1 | 0 | 2 | 0 | 20 | 37 | |
| Avg Win | $250 | $206 | $250 | $247 | $250 | $197 | $186 | |
| Net Win | $250 | $413 | $250 | $988 | $250 | $20,688 | $24,925 | |
| Win | 1 | 2 | 1 | 4 | 1 | 105 | 134 | |
| Avg P/L | $13 | $42 | $250 | $81 | $250 | $87 | $70 | |
| Net | $25 | $125 | $250 | $488 | $250 | $10,925 | $12,013 | |
| Total | 2 | 3 | 1 | 6 | 1 | 125 | 171 | |
Table - 2 Gap Fade Probabilities(based on timing)
Profit Target = Gap Close, Stop = 8.5 points.
| Opening Zone | > H | H-C | C-O | O-L | < L | All | All | |
| Short | Short | Short | Long | Long | Longs | Shorts | ||
| PF | 2.32 | 1.19 | 1.09 | 0.61 | 0.88 | 1.27 | 1.58 | |
| PCT Prof | 68% | 80% | 71% | 42% | 43% | 66% | 72% | |
| Avg Loss | $285 | $344 | $343 | $305 | $213 | $324 | $323 | |
| Net Loss | $8,563 | $5,850 | $10,988 | $4,575 | $850 | $28,175 | $31,025 | |
| Loose | 30 | 17 | 32 | 15 | 4 | 87 | 96 | |
| Avg Win | $316 | $101 | $154 | $255 | $250 | $213 | $197 | |
| Net Win | $19,888 | $6,988 | $11,988 | $2,800 | $750 | $35,863 | $48,950 | |
| Win | 63 | 69 | 78 | 11 | 3 | 168 | 249 | |
| Avg P/L | $122 | $13 | $9 | $68 | $14 | $30 | $52 | |
| Net | $11,325 | $1,138 | $1,000 | $1,775 | $100 | $7,688 | $17,925 | |
| Total | 93 | 86 | 110 | 26 | 7 | 255 | 345 |
If you need help with reading and using these data please visit Fading Opening Gaps 101.
If you need help with trading in general, the best place I have found so far is LBR Group headed by market wizard Linda Raschke. Beware that most other sites are purely scams.
Good luck and please direct any questions or suggestions!
Copyright © Ali Mohseni 2010 Charts are created using Tradestation software.
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