I was too busy at work to put on any real $ trades, but I spent part of the day in Emini Addict's live trading room (it was free for today). Due to lack of time, I didn't really focus much on his "ambush" setups but I think the gist of it is drawing Fibonacci retracement levels from swing high/low and expecting a buy/sell response at certain fib levels (50%-61.8%). This is an over-simplification and just a guess (you can check his blog for details). One thing that did catch my attention though was his money management technique. He always uses a 6-tick (1.5 point) stop-loss. He exits half of his position at +2 ticks, and tightens the stop-loss to 4-ticks, or at times, to 2-ticks making it a risk-free trade minus commissions, and rides out the remaining position to target or stop. I tried it out on Sim trading 2-lots and was up +$300 on a few trades; and this was with relatively poor execution (a couple of trades were taken while I was on a conference call). Do you guys have any feedback on this trade management method? It requires at least 2 contracts, along with a very high hit rate in order to be successful (my win rate was around 80%). Regardless, I think Emini Addict was up pretty good on the day, and at $29.99/month, his chat room is a good educational resource for new traders.
Market Balance (5-min)
You can see from this balance chart how my Rule of Shorts below the mid-point and Longs above, would have kept me out of trouble today. The mid-point is the gray line on the chart.