I’ve been surprised by the number of people who have shown an interest in the eminiplayer zones. Two of my trading buddies have subscribed to it. I think this is great because it will give us something in common when analyzing our trades and sharing our ideas about how we saw it. If you’re not a subscriber, he tweets his charts showing his zones towards the end of the US RTH session so you can study them to see if it’s something that can help you.
Monday I did well on ES but those gains were reduced by a loss on the Bund. And so I decided to focus on ES & Stoxx. In the past the Bund was correlated (inversely) with these markets and there was a real synergy. Right now that’s not the case.
So I thought it’d be a good idea this week to show how I’m trading the EMP zones. EMP did a webinar recently about this where he interviewed one of his subscribers and I realized how simple trading can be and how I’ve complicated the heck out of it! So I’m trying to simplify as much as possible. I do want to stress the fact that I don’t just blindly trade his zones, although I think that’s possible if you want to do that. One reason I do my own homework is because I’m also studying Stoxx (and sometimes Bund & Euro).
Here’s the basic idea of what I do:
- I study the weekly chart.
- I study the ES daily chart with micro-composites
- I study a Market Profile chart where I split & merge profiles to isolate balance areas
- I study the “template day” profiles & S/R levels
- I combine all those to come up with my own areas of business. I plot these on a chart.
- I then plot the EMP zones on a second chart and see how they relate to mine. This is a great learning experience. By doing my own homework I can better understand the EMP zones and that increase my confidence. I can also understand if price stops short in front of a level or goes beyond it a little bit.
- I determine my bias for the day and where it will change. I have my own method of doing this and I also use the EMP bull/bear line. When these agree then that’s good. When they’re conflicting I’m more careful because it’s not so clear.
- I decide where I’ll look to take my trades and put audio alerts there.
- When price gets there, I start watching the breath (NYSE TICK and S&P 500 Adv/Dec), footprint and “order flow” (I still dislike that term but volume seems static and order flow seems more dynamic and it’s important to see as dynamic). I have tools to help me with this plan to make them publicly available in the future. I also decide where I will be wrong.
- If I see a change in order flow to support my trade then I enter. Sometimes I scale in depending on my confidence and the risk (if we’re at the front of an area I enter 1 contract and look to add a second towards the back of the area). If price goes beyond my area I take a loss. I take the first scale at the next level (could be mine or EMP’s or an important intraday level) which must be more than 2 pts away or I skip the trade. And for the second I target the next level.
So knowing that, I thought I’d share my ES trades and you can share yours and ask questions. I will plot my trades on a chart with the EMP zones so that we can use the EMP zones as a common basis. If I have something that differs I’ll try to note that.
Monday March 5:
Tuesday March 6:
I hope that showing the trades and my interpretation of the zones will allow collaboration. I welcome all questions and feedback. If you’d like to post your charts & trades or ask a question please leave a comment below.