Took one FBD trade today:
Low: 4126.50
Low of Undercut: 4123
Entry trigger: 4134
First target: 4147
Second target: 4156
Stop Loss: 4121 (then moved up to 4128, then trailing stop)
NOTE: When trading, I’m usually on either the 30 min or 1 hr chart, and I sometimes use the 15 min chart to execute. However, in order to show roughly where I entered/exited, below is the 15 min chart.
This morning, I drew out the Sunday night/overnight low at 4126.50…not really confident we’d see it, but I wanted to be prepared in case we did (also had Friday’s low marked). Mancini had laid out a plan over the weekend for the 4147 and 4156 targets, which hit in the overnight session, so I thought we actually might see some continuation upwards, but alas, the market opted for another day of ranging within the chop instead.
ES tanked after the bell and dipped below the overnight low all the way to 4123. On the hourly (and even the 30 min) chart, there was a nice wick back up. Normally, I would have set an entry +5 points from the previous low, but Mancini had mentioned the 4134 level as a possible entry point in his substack over the weekend, and since it was only 1 point up from where I would have entered, I decided to go with his entry instead for extra safety and also because he’s the GOAT.
Factors in favor:
- RSI reset for move up
- clipped ONL
- Wick on hourly chart
- within chop range; good cond for FBD
- within 8-11 trading window
Factors against:
- none
I entered at 4134 with two contracts. Considering there were so many reasons in favor of the trade and really none against it (that I could think of), perhaps I should have gone with three contracts instead of two. However, that would have been more risk than I am currently comfortable with, so I’m glad I stuck with two.
It took a bit of time, but in the afternoon, price pushed up. When it seemed to be holding above 4134, I moved my stop from 4121 up to 4128. There was a Mancini level at 4129-32, and I figured if it dropped below 4129, there was a decent chance it would come back down anyway, so I shaved off some risk and placed my stop at 4128. Then, once price hit 4144, I moved my stop loss to 4135, since I didn’t want a trade that was 10 points in the green to go red.
Price eventually reached the first target, and my limit order executed at 4147. I did ask Adam if he had any guidelines for stops for runners, and he replied:
For sure – 4139-29 zone from newsletter has been very lucrative today/last night. On runners I do use trailing stops and I manage it differently everytime just based on my discretion. I don't have any clear rules for it other than I won't let it go much below my break-even
— Adam Mancini (@AdamMancini4) May 15, 2023
Later, someone asked him where he would place his stop in this trade, and he answered, “4124 or so.” Adam gives the trade a lot of room to work, but for me, I decided to place a 10 point trailing stop on my runner. For one thing, for the sake of my small account, I don’t want to let a 10+ point winning trade go from green to red. Also, I knew I needed to take profit before the end of the ES session or else Tradovate would auto-liquidate me anyway.
Price peaked just shy of the 4156 second target before coming swiftly back down and hitting my trailing stop at 4146.25. Using a trailing stop means I’ll miss the top ten points, but I think this is a good way for me to lock in profits on my runner. I’ll probably utilize this exit for my runners moving forward (except for the times I’ll need to exit 15 min before close).
Result: +13 pts on first contract, +12.25 pts on the runner
6 FBDs down, 94 to go!