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Took a trade from the 16th into the 17th — an OVERNIGHT trade! *le gasp* Here’s the breakdown:

Low: 4120.50
Low of Undercut: 4120
Entry trigger: 4126.50
First target: 4134
Second target: 4148
Stop Loss: 4118 (then moved up to trailing stop)

Factors in favor:

  • EOD dump, RSI low for move up
  • reclaimed low in last few min
  • wick on hourly chart
  • seems to pin to 4135 this week, so expect move up
  • Mancini mentioned watching for 4128 level reclaim, ON entry

Factors against:

  • it’s an overnight trade

First off, the low that I was using was last Thursday’s low of day (LOD) at 4120.50:

With the above in mind, here’s how it played out:

Price dropped beneath the low (just barely!) to 4120, undercutting it by only .50 on Tuesday afternoon before reclaiming right before the close. Since I can’t hold into the ES futures’ closing bell at 5 pm (my account is too small, so I’d get auto-liquidated at 4:45 pm), I planned to reassess when futures opened at 6 pm. During that time, Mancini dropped his Substack newsletter which mentioned that he would be looking for a trade in the evening session, particularly looking for “a long on the failed breakdown of the 4127 level (perhaps 4129 or so) and another alternative would be the reclaim of 4135, but I don’t chase, I’d need to see a good dip reaction there, then try the long a few points above.”

When futures opened, my entry trigger was 4126.50, but I got filled at 4126.75. Then, after further considering Mancini’s plan, I decided to enter a second contract at 4129. It was a bit risky to me to hold two contracts overnight, but I have noticed that while the overnight sessions are low volume, they haven’t really gone too outta pocket in terms of movement. Also, since Mancini mentioned he would be watching for trades in the evening session, it gave me a little more confidence to give it a try. I put my stop at 4118 which also happened to be a major Mancini level (maybe I should have put it at 4117 to be safe? I’m not sure.), put in a limit order for one contract at 4134 with the intention of letting the other one act as a runner (but putting a limit order for 4152 just in case things got real crazy overnight).

At about 4 am, the first contract sold at 4134. I watched the other one climb in pre-market and decided to put on a trailing stop. I allllmost just left my original 4118 stop on to give the runner some flexibility, but I stuck with my original plan and moved it up. After the opening bell, price whooshed down and I was stopped out at 4137.25. In the moment, I thought, “YAAASSS THIS IS WHY WE HAVE TRAILING STOPS!!!!” But then price got bought back up, and I had a feeling I was about to witness a FBD of a level (as opposed to a distinct LOD or overnight low (ONL), and sho nuff, price YEEHAWed all the way to 4177+ (well, after a brief pause around 11 am). I didn’t enter because I’m really focusing ONLY on the Low FBD for these 100 trades, but I think it does help me for when I’m ready to add the Level FBD to my arsenal!

I’ve been pondering my approach to stop losses, and if I should have kept my runner SL at 4118 rather than the trailing stop. If I had, I might have caught more of yesterday’s move. But in reality, my account is quite smol, and at this point I’d rather err on the side of caution with a ~10 pt trailing stop on a runner that is 10+ points in the green (I’m trying to adhere to the “no green to red on trades that are 10+ pts in profit” policy) and build my account up. Eventually, once my account is bigger, I’d like to work with 4 contracts per trade and leave the runner with greater wiggle room to work. So if the majority of runners get stopped out, it’s worth it to me to keep the trailing stop and miss out on the big runs until I feel more comfortable with not locking in the gains.

And while it is certainly not a GREAT feeling to watch a trade YEEHAW its way to new highs without you, this challenge is teaching me that opportunities present themselves quite often, so no fomo.

Result: +7.25 pts on first contract, +8.25 pts on the runner

7 FBDs down, 93 to go!

Here is a trade from today (May 18) that I DID NOT take because I was putting my baby down for a nap at 9:30ish:

This was a beautiful FBD of the overnight low (ONL) with a nice wick and then it just TOOK. OFF! And this chart only showed the morning activity…the day closed at 4215.50!

But to be COMPLETELY honest…even if I hadn’t been putting my baby to sleep at that time, I really don’t think I would have taken the trade. I had briefly considered the possibility in pre-market but my reasons against it were:

  • not a DISTINCT low…yes, it’s an ONL, but I prefer a distinct wick rather than a sideways grind
  • we had a pretty decent-sized move up yesterday, so I doubted we’d see more continuation (thought it’d be a day of chop/consolidation)
  • it has been a choppy OPEX week and I felt pretty sure that the market wouldn’t make a huge break before Friday

Essentially, my own biases kept me from objectively looking at the trade. Context is certainly important, and I’m still in the process of learning how to consider context and let it help inform my trades while somehow staying objective…yeah, I’m going to ponder this a bit more.

So what have I learned from this?

  • Overnight lows are just as valid
  • OPEX weeks are wild (I already knew this, but good reminder to expect the unexpected)
  • stay objective and follow price action only — do your best to consider context but leave biases at the door

In all fairness, it’s possible we could have chopped all day, too. Nothing has a 100% success rate of predictability in the market. You could have all the reasons in favor or against, and the market could still just as easily move the other way. Probabilities are just that — probabilities, not definites. I still think all the reasons I listed could have been considered “valid” reasons had we chopped all day instead. But it worked out that we squeezed instead! So I’ll continue taking my notes, observing, trading, and managing my risk as best I can — and racking up experience points to master this FBD setup!