Methodology Introduction

Since the vast majority of retail traders we encounter are trading the E-Mini S&P 500 futures (ES) we decided to use some of our own intraday models in this market as the basis for both the public and private portions of the blog. The set of models we share are relatively short term, countertrend in nature, and rooted in price discovery and the auction process. To summarize, the price levels shown on the daily worksheets are areas where we expect buyers and sellers in multiple timeframes to make the majority of entry and exit decisions. These battles tend to manifest ranging activity at the least and in many cases major market turns. The shared models derive their most basic edge from a consistently better than even money probability that the price action around these key levels will provide trading opportunities with the most favorable risk and reward characteristics.

Each day we post our actual trading plan sheet we use in our own execution of these and other models. On the sheets you will find each zone marked with an upper and lower price limit for potential entry points, along with detailed comments as to what our thoughts are concerning the significance or expectation of action around each level. Additionally, there are sections for economic releases, if any for the day and a breakdown of both broad market and institutional volume and delta with comments for the prior day session and the current overnight session ahead of the cash market open. Along with the daily plan sheet we also post a recap of the day’s trading showing how the market respected (or didn’t) respect our anticipated key levels during the session along with one example trade for the day. All three items will be posted shortly after the close and all are both welcome to and encouraged to make use of the information by way of comparing our plan and subsequent actions to your own as an ongoing educational tool. For a look at the ongoing results of the example model we track which trades the same published levels, go here:

Example Model and Results