IMPORTANT NOTICE: Futures trading has large potential rewards, but also large potential risk . You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. There is no claim or guarantee that the following information are free of errors,including typos, program bugs, error in modeling the data, internet errors, etc.
Trade at your own risk!
These Probabilities Have lead to 100% Winning Trades so far!
Please note that the above factual statement does not mean that it is mathematically possible for this to continue for ever. Having said that, I believe this system will help you gain remarkable advantage over random trades.
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.
For an overview of today's market see this video. Yesterday's Forecast and Recap
Yesterday's Forecast:
Before Gap
Both market structure and timing data shown in Table-1 and Table 2 below agree that if the market opens in C-L zone, below the close but above the low of yesterday(1014.25 to 1010.75), a long trade has a good chance to succeed. I am going to take this trade. A word of cautious is that Tuesday is the first day after the long holiday and it may have some inherent behavior that is not taken into account in these data.
Both market structure and timing data shown in Table-1 and Table 2 below agree that if the market opens in C-L zone, below the close but above the low of yesterday(1014.25 to 1010.75), a long trade has a good chance to succeed. I am going to take this trade. A word of cautious is that Tuesday is the first day after the long holiday and it may have some inherent behavior that is not taken into account in these data.
After Gap
C-L zone is also a good long trade for After Gap. I usually take my profit for Before Gap play, then wait for a pull back and go long again for an additional 4 points above close(1018.25). Another high probability zone is the H-O zone. So if the market opens below high but above open of yesterday and it trades down to close(1014.25), then I wait for a pull back and I go short targeting 4 points below the close(1010.25). Since the low is only two ticks above the target and may generate some resistance, I would target 1011 instead.
After Gap - No trade triggered..
C-L zone is also a good long trade for After Gap. I usually take my profit for Before Gap play, then wait for a pull back and go long again for an additional 4 points above close(1018.25). Another high probability zone is the H-O zone. So if the market opens below high but above open of yesterday and it trades down to close(1014.25), then I wait for a pull back and I go short targeting 4 points below the close(1010.25). Since the low is only two ticks above the target and may generate some resistance, I would target 1011 instead.
Yesterday's Recap:
Before Gap - ES opened at 1031.25, above the high and not in a zone with high probability. So no trade triggered.After Gap - No trade triggered..
Additional Comment: Yesterday, the probability numbers did not trigger any trade. However, I made a trade using other setups. After making a new low in price and tick at about 14:15, I waited for a pull back and I went short. The market continued going up hitting my stop by one tick before going down. So I lost 5 points in this trade. Looking at this afterward, I see some reasons I should have been more cautious taking this trade. But I think my impatience blocked me from keeping an open mind.
Today's Forecast Summary:
Before Gap
Both market structure and timing data shown in Table-1 and Table 2 below agree that if the market opens in C-L zone, below the close but above the low of Yesterday(1024.00 to 1013.50), a long trade has a good chance to succeed. I am going to take this trade. .
Both market structure and timing data shown in Table-1 and Table 2 below agree that if the market opens in C-L zone, below the close but above the low of Yesterday(1024.00 to 1013.50), a long trade has a good chance to succeed. I am going to take this trade. .
After Gap
C-L zone is also a good long trade for After Gap. I usually take my profit for Before Gap play, then wait for a pull back and go long again for an additional 4 points above close(1028.00). Another high probability zone is the H-O zone. So if the market opens below high but above open of Yesterday and it trades down to close(1024.00), then I will wait for a pull back and I go short targeting 4 points below the close(1020.00).
ES pivot points:
R3: 1075.25
Fib 2: 1054.00
R2: 1050.25
Fib 1: 1045.25
High: 1038.50
R1: 1037.00
Open: 1031.25
Pivot: 1025.25
Close: 1024.00
Low: 1013.50
S1: 1012.00
Fib 1: 1006.75
S2: 1000.25
Fib 2: 998.00
S3: 975.25
C-L zone is also a good long trade for After Gap. I usually take my profit for Before Gap play, then wait for a pull back and go long again for an additional 4 points above close(1028.00). Another high probability zone is the H-O zone. So if the market opens below high but above open of Yesterday and it trades down to close(1024.00), then I will wait for a pull back and I go short targeting 4 points below the close(1020.00).
Today's Data:
ES pivot points:
R3: 1075.25
Fib 2: 1054.00
R2: 1050.25
Fib 1: 1045.25
High: 1038.50
R1: 1037.00
Open: 1031.25
Pivot: 1025.25
Close: 1024.00
Low: 1013.50
S1: 1012.00
Fib 1: 1006.75
S2: 1000.25
Fib 2: 998.00
S3: 975.25
Profit Target = Gap Close, Stop = 7.5 points.
| Opening Zone | > H | H-O | O-C | C-L | < L | All | All | |
| Short | Short | Short | Long | Long | Longs | Shorts | ||
| PF | 0.48 | 0.90 | 1.12 | 1.59 | 0.84 | 0.98 | 1.02 | |
| PCT Prof | 33% | 52% | 70% | 79% | 57% | 66% | 66% | |
| Avg Loss | $261 | $241 | $232 | $222 | $294 | $270 | $239 | |
| Net Loss | $2,613 | $4,825 | $19,225 | $5,100 | $15,275 | $22,400 | $29,613 | |
| Loose | 10 | 20 | 83 | 23 | 52 | 83 | 124 | |
| Avg Win | $250 | $197 | $113 | $91 | $185 | $134 | $128 | |
| Net Win | $1,250 | $4,325 | $21,438 | $8,113 | $12,763 | $21,975 | $30,275 | |
| Win | 5 | 22 | 190 | 89 | 69 | 164 | 236 | |
| Avg P/L | $91 | $12 | $8 | $27 | $21 | $2 | $2 | |
| Net | $1,363 | $500 | $2,213 | $3,013 | $2,513 | $425 | $663 | |
| Total | 15 | 42 | 273 | 112 | 121 | 247 | 360 | |
Table - 2 Gap Fade Probabilities(based on timing)
Profit Target = Gap Close, Stop = 7.5 points.
| Opening Zone | > H | H-O | O-C | C-L | < L | All | All | |
| Short | Short | Short | Long | Long | Longs | Shorts | ||
| PF | 4.57 | 1.28 | 1.83 | 1.25 | 1.11 | 1.09 | 1.67 | |
| PCT Prof | 77% | 63% | 77% | 81% | 56% | 70% | 74% | |
| Avg Loss | $250 | $288 | $310 | $423 | $355 | $363 | $301 | |
| Net Loss | $750 | $2,013 | $9,300 | $6,350 | $9,225 | $31,600 | $25,000 | |
| Loose | 3 | 7 | 30 | 15 | 26 | 87 | 83 | |
| Avg Win | $343 | $215 | $173 | $122 | $311 | $170 | $175 | |
| Net Win | $3,425 | $2,575 | $17,000 | $7,925 | $10,250 | $34,538 | $41,688 | |
| Win | 10 | 12 | 98 | 65 | 33 | 203 | 238 | |
| Avg P/L | $206 | $30 | $60 | $20 | $17 | $10 | $52 | |
| Net | $2,675 | $563 | $7,700 | $1,575 | $1,025 | $2,938 | $16,688 | |
| Total | 13 | 19 | 128 | 80 | 59 | 290 | 321 | |
Table - 3 After Gap probabilities(based on Market Structure) Profit Target = 4 points, Stop = 7.5 points. Conditional probabilities after the gap is filled.
Good luck and please direct any questions or suggestions! Copyright © Ali Mohseni 2010 Charts are created using Tradestation software. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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