nicker
Short

Frog-Kiss Short Russell

ICEUSA:RJ1!   Russell 2000 Mini
186 1 0
I call a trade a frog-kiss trade if the potential reward is huge and the necessary stop is very small. Because of extremely high R/R, the percent win rate can be as low as 30% and still give huge profitability. The Russell 2000 futures had a 5 wave up Nov 16- Mar 15, followed by an ABC down, where the B wave retraced all the way to the highs. This is much more common in a major trend change than in a corrective ABC followed by additional uptrend. If indeed it were a trend change, then the C leg down may be W3 of an impulsive five wave down, or w1 of W3 down. This C leg down ending Apr             18, was followed by a 5w up, and this is where we are now. That 5w up may either be the first leg up of a new impulse going to major new highs, or it may be the end of a complex w2 up, which could be followed by a strong downtrend. While many other things suggest continued strength upward, three things make this a perfect spot to risk a frog-kiss, as it won't hurt much, and could turn into a prince. 1) the wave count described could go either way, but actually favors down, 2) price touched just 113% of the price delta Apr             11-18, a classic bull trap spot, 3) H&S in the last 4 hr             of May 6. A stop at 958.7 is cheap insurance for possible targets of 949.7 or lower. Frog-kiss trades also offer great opportunities for SAR             , if the alternate scenario rules.
On an intraday trade, a frog-kiss stop is -3 t max. On this overnight trade, my SAR stop had to be -12T. It was hit, and the resulting Long went 52t, for 10am logical exit, or 50% win, with win 4x > loss.
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