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It’s been a little while, but I finally caught another Failed Break Down setup today! Between taking care of my baby, traveling, and still learning the ins and outs of NinjaTrader (which I’m getting a little better at, btw), I haven’t been around the computer in the mornings as much lately. But I have been continuing to watch ES and read the great Mancini’s substack and Twitter commentary and have been taking notes.

For one thing, I’m realizing that it’s ALL. ABOUT. CONTEXT. Mancini has been dropping some nuggets of wisdom lately, and it’s been impacting my approach:

I’ve really been thinking on this tweet and the breakdown levels. In the past, I would take any FBD of a previous low regardless if a level was involved; the previous low WAS the level for me. But now I realize it totally makes sense to think of it more so in terms of level breaks rather than an arbitrary low. Sometimes the arbitrary low does work out for a FBD, but I think looking for the level break builds a stronger case for the setup.

Here’s the breakdown of my trade today:

Low: 4414.50
Low of Undercut: 4409.75
Entry trigger: 4119 (but I entered at 4417.25)
First target: 4421-25
Second target: 4433
Stop Loss: 4407

Factors in favor:

  • wick
  • room for RSI to move up
  • retested support level 4408, reclaimed 4413

Factors against:

  • none that I could think of

The overnight low (4414.50) was basically the same as Mancini’s 4413 level and the undercut (4409.75) was close to touching his 4408 level. The pre-market drop reset the RSI, so I thought there was room for some kind of bounce up the levels. Normally, I would enter 5 points above the previous low, but I market ordered and filled one ES contract (on the evaluation account) at 4417.25. The next level up was 4421-25 resistance, and I market ordered out at 4423.25.

Result: 6 points on one contract

Had I taken more than one contract and left a runner, the runner would have eventually hit the next level (4433+) since the FBD setup remained intact the entire day; price never went back below the undercut low.

Now, in reality — would I have been able to stomach those swings? Maybe on MES, but very likely not on ES. But I’ve decided to give ES more of a shot (small size for now, and only on high quality setups) since that’s what Adam actually refers to, and there are moments where MES does not align exactly with ES (see my 5/23/23 Trade Review). I do want to continue to get in the habit of utilizing MES for the purposes of being able to buy 4 contracts, though (sell 3 at the first target, leave a runner). It’s a little tough to enter both MES and ES depending on how quickly the price action moves and what the setup is (though stop orders help), so I’ll do my best and reassess as I go.

13 FBDs down, 87 to go!