My bearish filter before defining pending orders.
Today we will take a look at S&P500 Futures. In the last weeks, I have been following the index looking both for bullish and bearish opportunities. On Friday, I saw the breakout of the current correction, which continued on Sunday/Monday. That was one of the main things I was looking for before setting orders. Now I can define my last filer. IF the price makes a pullback similar to the green line I made, I will set pending orders on a new low, as you can see on the setup.
The main idea is that we are working with situations that we defined in advance. Is that a guarantee for a profitable setup? Absolutely not! Nothing is a guarantee that the next setup will be a take profit. However, when we define things in advance based on past behavior and the price full-filled those filters, we can be sure that we are in front of a scenario that has an edge; that's why I'm thinking of taking this trade.
Final details: In case it happens, this pullback can take from 7 hours to 2 days. The main element I want to see is a clear 40% to 50% retracement; that would be a solid confirmation for me to say, "it's time to set pending orders on a new low." The risk I will be using here is 3% of my capital on the stop loss. And of course, if the price keeps falling or if the price goes up but never makes a new low, I'm NOT going to trade this scenario.
Check routine before taking setups.
-What would happen if everything goes wrong?
-Am I using good risk management?
-Do I feel comfortable with the monetary loss in nominal terms?
-Do I have my Entry, stop, break-even, and take profit level defined?
-Am I going to use a re-entry?
Defining all these things in advance will provide you with a cleaner execution and a high level of control. Thanks for reading!
The main idea is that we are working with situations that we defined in advance. Is that a guarantee for a profitable setup? Absolutely not! Nothing is a guarantee that the next setup will be a take profit. However, when we define things in advance based on past behavior and the price full-filled those filters, we can be sure that we are in front of a scenario that has an edge; that's why I'm thinking of taking this trade.
Final details: In case it happens, this pullback can take from 7 hours to 2 days. The main element I want to see is a clear 40% to 50% retracement; that would be a solid confirmation for me to say, "it's time to set pending orders on a new low." The risk I will be using here is 3% of my capital on the stop loss. And of course, if the price keeps falling or if the price goes up but never makes a new low, I'm NOT going to trade this scenario.
Check routine before taking setups.
-What would happen if everything goes wrong?
-Am I using good risk management?
-Do I feel comfortable with the monetary loss in nominal terms?
-Do I have my Entry, stop, break-even, and take profit level defined?
-Am I going to use a re-entry?
Defining all these things in advance will provide you with a cleaner execution and a high level of control. Thanks for reading!
