Power Emini Commentary – Notes – Education – Examples
We started a new thing in 2025. The Power Emini “Notes” section. Below you’ll find ongoing commentary, trade examples, charts and general short-form random posts. This page gets updated every few days, so check back soon.
Why Protecting Gains is Important
12/3/2025
Today was one of those days where Target 1 got hit and then price made just enough of a counter-trend move to hit the tightened Trailing Stop. The net result was a measly +4.5 point gain even though price did get about 17 points of upside “traction” from the Entry before the pullback.
The important thing to consider is at the very point the Trailing stop got hit, the market could have just as easily rolled over completely.
Yesterday the market rallied up early and then reversed and subsequently hit the lows of the day. When the (tightened) Trailing Stop got hit today there was a big red candle and we had no idea how much further the market was going to fall, so the Trailing Stop “protected profits” and eliminated the risk of a loss on the trade.
There’s a few different ways to think about an Alert that turns out like this. The way I look at it is that I’d rather protect a position rather than take the chance of a profit turning into a loss. Especially given how flaky the market action has been the past couple days. Part of what makes the system work is the idea that the Trailing Stop tightens quickly to help reduce risk – with the idea it will get the stop to breakeven once Target 1 gets hit. I consider every Alert that hits Target 1 a winner because that’s where we have eliminated the risk of a loss on that trade.
Looking at the chart we see that the price continued higher after that, but there was no way to know at the time. If the opposite happened and price ended up making new lows after the Trailing Stop got hit, it would have looked like a perfect way to protect the existing gains.
If one were trading the system discretionarily they could have chosen to use an even tighter stop between T1 and T2. Or they could have chosen to use a wider stop, say at the Alert level (green dashed line) and it wouldn’t have been hit.
Here’s the thing about Trailing Stops. Some sessions it would be advantageous to use a tighter stop and some sessions it would be better to use a wider stop. And how it works out will be determined by how the price action unfolds after we tighten the stop.
The system is programmed to keep the stop at a distance that allows for normal price fluctuation and withstand moderate counter-trend moves. A few ticks made the difference today but overall the Trailing stop is calibrated to work over all sorts of different market conditions, volatility and ATR’s.
There’s one thing that’s been bugging me lately and I’m going to do some research and see if it can be improved.
That’s when the price gets about halfway between T1 and T2. A lot of times I think the Trailing Stop should protect more of the profits. I’ve talked about that here in the past when I’ve mentioned that you might consider not letting more than say a 10+ point profit slip away when price gets sandwiched between the targets. But it’s not that easy. What I just said usually applies more to when price stalls out and trades sideways between the Targets and cases like today where price reverses quickly it gets a little trickier.
But I’m considering making some slight modifications to the Trailing Stop moves in the upcoming NEW VERSION of the software / system we’re currently working on.
I wasn’t going to mention that just yet, but I just did. I’ll have more to say about it as we go forward, but just to let you know, we have a big upgrade coming in 2026.
Sub-Optimal Price Action
12/2/2025
The market had abnormally low volume & liquidity again today. The result was generally choppy price action random erratic price moves. It was a mess.
The good news is that the pre-market and opening ATR’s were relatively narrow so the distances to the stops and targets were small too. But once things got going the price gyrations both up and down were fairly substantial. In other words the price took out both the highs of the session and the lows of the session multiple times before lunchtime. And the moves happened quickly.
Some sessions the price action just basically sucks (to use a technical term) and it’s nothing to get concerned about. We have to trade what the market serves up and it’s like a rainy day when you had plans outside. Support and resistance levels don’t always mean anything when volume and liquidity are low. I saw a post that said SPX had the lowest volume since January yesterday and today was probably similar.
Some sessions price just chops around randomly with no rhyme or reason. Price doesn’t always respect the laws of technical analysis.
I talked about 3 Alert sessions last month and today was a good example of why we have the system set to only issue a maximum of three filled alerts per day. Because the market experiences choppy non-directional sessions here and there and there’s no reason to continue to trade when conditions are sub-optimal.
Market conditions during any given session basically determine how well any system or strategy will do that day. And while it might be easy to look at a chart in hindsight and think that you could have have traded the twists and turns, the truth is that in the real-time heat of battle we know it’s a lot harder than that. We never know what price will do next.
Today’s session just didn’t have any “flow” to it and it definitely wasn’t a trending market.
So out of the three Alerts today only one hit Target 1 and the other two hit the stop. But as I said, the early ATR’s and opening range were pretty tight so it wasn’t a disaster, just a crappy session for our style of trading. Part of trading a system is realizing that some sessions things won’t work out and that’s usually due to market conditions. And the key is to not let it affect us mentally. While the system has a built in overall edge, the outcome of any one Alert or market session is purely random. I like to use the analogy that it’s like the house edge in Vegas. The House is not concerned one bit when one of the customers goes on a winning streak because they know that over time and overall they will prevail.
Here’s what a choppy low volume, low liquidity session looks like.
The Green dashed line is the Long Alert level and the Red dashed line is the Short Alert level. The Gold lines at the top and bottom of all the lines are Target 1 and you can see how price was all over the map and the system took its 3 attempts early in the session and that was it for the day.
Hopefully we won’t see too many more sessions like this, but read my comments below about trading in December.
When Target 1 Gets Hit and That’s It
12/1/2025
This morning’s price action offers a good example of how and why sometimes Target 1 gets hit and “that’s it” even through price might eventually continue in the direction we were trading.
Shortly after the cash open there was an impulse move higher and the system gave a Long alert that hit Target 1 quickly and even made it about half-way to Target 2. But shortly thereafter price reversed and gave back most of the move and hit the tightened Trailing Stop.
Nothing really out of the ordinary. Except the fact that it didn’t issue another Long Alert.
Price eventually rallied higher to hit what would have been both Targets but there was no Alert and you might wonder why. The simple answer is a rule we have programmed into the logic that says “in order to get a new alert in the same direction as a previous trade that hit the Trailing stop, there has to be a 1-minute candle that closes in the opposite third of the Trigger Range.
It’s honestly a little difficult to explain why that’s so important, but the idea is that we don’t want to get right back into a trade (in the same direction) that we just got stopped-out of. Today that rule prevented what would have been a good trade but if we took a dozen market sessions where T1 got hit and then the Trailing Stop was tagged, you’d see that more times than not, we wouldn’t want to re-enter a trade in the same direction. Unless price closed back in the opposite third of the range.
And the crazy thing about today is that all the system would have needed to issue that second Long alert would have been a 1-minute close at 6816.00 or lower. The lowest 1-minute close back inside the range this morning was 6816.75. So 3-ticks made the difference even though price did actually poke below that.
Here’s the chart to help visualize everything.
We can see the price was kind of all over the map and fairly erratic most of the session. There were quite a few long-range 5-minute candles with 14-16 point ATR’s both up and down before lunchtime. That’s what I mean by erratic price action.
So all in all it was what we consider to be a breakeven day even though it was a few point loss due to the distance between the Alert price and the fill. Honestly the rally past Target 1 initially came pretty close to triggering another ratchet of the Trailing Stop but didn’t. And that was due to another “slight miss” on a 1-minute close between T1 and T2.
I know it seems unusual to have two different things like that happen, but in order for there to have been another Trailing Stop move when price was in between the two Targets, we would have had to have a 1-minute close at least half-way between T1 and T2. While price did poke up there, none of the 6-8 1-minute pokes closed more than halfway.
The reason we use 1-minute closes in some of the logic is basically for confirmation similar to the way the system takes an Entry. In other words price has a tendency to spike for a few milliseconds and that doesn’t always constitute a legitimate move.
Targets and Stops happen in real-time, but certain aspects of the logic are based on closing candles, such as Trailing Stop ratchets and signaling new Alerts. It’s not really something you need to know but I wanted to do my best to explain what transpired today and why the system didn’t issue another Alert.
No big deal. There are plenty of days that don’t turn out ideally but over the long series everything always works out. It’s been working out just fine for many years now.
December – This Year Could Be Different
Over all these years we’ve been trading the system, December usually has some specific characteristics. But this year could be different.
It’s been an unusual year so far and a lot of the “monthly seasonality” has been different than what I would consider to be average over the years. We’ve had the Momentum System running almost 10 years now so I have a pretty good idea of what the average month looks like as far as the market’s personality.
This year, the extreme volatility back in the Spring was uncharacteristic and even as recently as last week the market was different than I remember most Thanksgiving periods. It might have something to do with the fact that the nominal ES price level is about twice what it used to be. In other words, the point moves and ATR’s and general volatility at ES 6000’s are going to be elevated compared to back when it was trading in the 3000’s. But it’s interesting to note that a 1-point ES move is still $50 no matter what the price level is.
It’s a good thing we have the Micros.
It makes sense that the market moves more points these days, but I also attribute some of the increased volatility to the news cycle. It seems like there’s just more going on and the world has gotten a lot crazier over the years. Then again, there are some news items I’d assume would move the market more that it just shrugs off. Some of the wildest price moves we’ve seen this year were based on news releases that just came out of the blue and hit the tape. A Trump comment can move ES 50-100 points and that makes for a bit different environment than past years.
So this month I’m not sure what to expect other than the fact that the market should slow down and get pretty dull the last couple weeks of the year. Christmas and New Year fall on the last two Thursdays of the month. That means Christmas Eve and New Year’s Eve are on Wednesday’s and the Friday’s after both Holidays are also typically “mental holidays” for most people. I expect December 23rd to January 5th the “Holiday Season” for market participants.
The Friday after Christmas is an abbreviated market session so the system will be offline that day. I would guess that New Year’s Eve would see low participation even though the market is open all day.
In keeping with the idea I mention frequently here, market conditions are likely to be sub-optimal for trading the last couple weeks of the year and we want to keep our expectations low. It might be a good idea to gauge the price action to see if it’s even worth trading on some of those days where the market is open – especially the days between Christmas and New Year. Who knows? This year might be different. But judging from what I’ve experienced over the last decade, the last two weeks of the year just don’t usually present the best overall trading environment.
The volume and participation tend to be low and that leads to dull choppy price action which is not usually conducive to big trend moves. It’s just the “seasonality” and most traders are focused on other things. It’s a great time to spend time with family and reflect on the past year and set goals for the upcoming year. Honestly I love the Holidays and prefer to relax and be in “holiday mode” mentally between Christmas and New Year’s.
As we approach the last couple weeks of the year I’ll be posing reminders about keeping expectations in line with market behavior, so we’ll see how things look then.
But for now, as we get into December I’ll be using this page to post commentary, notes and charts relating to the ES / MES Momentum System, our trading strategy and whatever else comes to mind. This “notes section” of the website isn’t intended to be a daily recap, but usually gets updated with new material every couple / few days. It’s a good way for me to be able to post educational material and examples of how the Momentum System handles different market sessions.
Additional Useful Information
Moving Beyond the Trade Setup – Futures Trading Strategies to help Increase our Odds – In-Depth Article
November 2025 Commentary – Notes – Education – Examples
PowerEmini Day Trading Futures – Automated Alert Signals