This was my last E-mini trade of the week. I took a short and targeted my usual 3 points X3 contracts for a total of 9 points. You can see the entry and target in the pic. But that’s not what I wanted to show you. What I wanted to show you was the bounce off my grey zone.
Yep! The market came down, touched my zone, then bounced… see?
There was a reaction at the zone that I had drawn out before the price got there to begin with. I trade to my zones, and my zones only.
That reaction is what tells me my strategy is on point. The simple fact that the market reacts in my pre-drawn zones, tells me I’m not the only one looking at those levels. That, my friends, is a good thing! That is what I call “following the smart money.”
You see, as I said in my first post (read it here), the goal should not be to follow dumb money (you, me and every other retail trader). The goal is to follow the smart money. They move price, we don’t.
Since price reacted at my zone, I can assume that a lot of money came in to reverse its course off that area. In general, the only ones with enough money to reverse the course like that, is smart money – hedge funds and other institutions.
I use this same strategy every day of every week. I never trade without it. In fact, I use this same strategy for my stock picks too. I don’t day trade stocks, but the strategy works on all time frames, so I can safely pick my exit targets for my stock swing trades.
My E-mini win rate ranges between 80% and 90% on any given week, with an occasional 100% week. That’s hard to beat! It also allows me to widen my stop losses some, should I feel the need to. Sometimes I need to give my trades some room to breathe.
Do I win them all? Nope! Nobody does, and if they say they do, they’re lying. It’s as simple as that. But, I win far more than I lose.
Anyway, I’m starting to ramble so I’ll sum this up… A good strategy is priceless in my opinion. Absolutely priceless! And once you think you understand a good strategy, NEVER stop studying it. Continue to back test it, and continue to paper trade (simulated trading account) it with the goal of learning something new about it. There’s always something to learn, even if you think you know it all.
The markets are dynamic, they’re not static. So there is much to learn, and always room to grow as a trader.
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