The probabilities did not work in our favor this morning. What looked like a good trade opportunity turned out to be a losing trade. The ES opened near the top of our 5.00 / 8.25 range and slowly trended down towards the bottom. At 10:28am, the ES pushed through the bottom of the range with fairly significant volume which had the potential for a lot of trapped traders. After a rotation up, the next push down put in a higher low with strong buying. The probabilities were on our side for a long trade. This opportunity went nowhere and quickly moved towards the stop.
In retrospect, we did not adhere to our own warnings about the 2/4 level below the 5/8.25 level. However there many conditions on our side so it was worth the risk as shown on the chart.
Update (2:57pm EST): This long opportunity worked a little better than this morning’s trade.