Tuesday’s Blog Results: The suggested long level at 4285.50 bounced for 10.50 points.
Quick Tip: Scale in.
Consider the entry on the trade above. Price reversed right on the entry. No down money. If you were trying to reduce your risk by moving the entry deeper in the price level you would have missed the winner.
For our Volume Profile strategy, price penetrates the level by a maximum of 1 point 31% of the time before it continues in your desired direction. Think about it. If you’re not entering early you’re giving up 31% of your winning/breakeven trades! It’s way better to move your STOP in from the other side.
Another way to address this is scaling into the trade as it goes against you. Let’s say you’re a 6-contract trader. Entering 3 at the level and the remaining 3 as price moves against you little you’re reducing your risk and increasing your reward. The downside is when price does rocket in your direction you’ll have less size in the trade. Depending on market conditions, you may consider scaling in to the winner as well.
Today’s Best S&P Futures Turning Points (Plenty can change by the open, be aware):
Short Level: Sell 4370.50 stop 4376.00
Long Level: Buy 4208.00 stop 4203.25
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