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 will get updated with new material frequently, so check back soon.
What a Bad Fill Looks Like
You should be familiar with how the system gets filled on a trade, and it’s quite simple. When we get an Alert, the very next 1-minute closing price bar (or candle) that closes at least 1-tick (or more) PAST the Alert Price triggers in the trade.
On RARE occasion we get a fill that’s way past the Alert Price (Trade Price Barrier) and today was a good example. The system gave a Short Alert shortly after the open and instead of getting filled couple / few ticks past the Alert price, the next 1-minute price bar closed 7.00 points past the Alert. In this case it turned out to be a “bad fill” because there was no follow-through and the trade got stopped out. Fortunately there was a Long alert shortly thereafter that hit both targets which usually evens things out. The Long got filled 5-ticks past the Alert price which is more normal.
So what to do when you see an Alert that’s going to fill way past the Alert price? Well in many cases it’s no big deal because when there’s a lot of volatility and wide ranges, it typically doesn’t matter – price continues to move in the direction of the Alert. But sometimes a fill too far away from the alert price can thwart a trade as it did in this case. The distance from the Entry to target 1 was 4.25 points and if it had triggered-in closer to the alert price it would have hit T1.
But a lot can happen in 1-minute. It’s been several years, but I’ve seen ES move 30 points in 1-minute. That’s an extreme anomaly, but if you ever see something like that I’d recommend passing on the trade.
Generally speaking, the “fill” on an Alert is a couple ticks to a couple points past the Alert price and that’s fine. The stops and targets are calculated based on the actual fill (not the Alert price). When placing an order to enter you might get a slightly better or worse fill than the system and that’s fine too. It all evens out over the long series of Alerts.
Close but no Cigar
Price got within 1 (lousy) point of Target 2 but didn’t quite make it. It happens.
And today provided a good example of several different things to think about when trading the system. The first and most obvious is that when the price gets “really close” to T2, in my opinion it makes sense to consider using a tighter stop. I know everyone loves the idea of trading a purely mechanical system – and that will work out fine over the long run. But using a little discretion on occasion (under special circumstances) you can do better than the system.
In this case there were several options for using a tighter stop when price was right up near T2. I was talking to a new user today and mentioned that when price gets past T1 and about 75% of the way to T2, that’s a good time to be a little more pro-active with the stop. Especially on volatile days like this. (note the 5 point increments on the chart scale).
So the obvious choices when the price was within a point of Target 2 were to go ahead and say “close enough” and take the profits somewhere in the 6050-6055 area. But that’s not always the best option since we know price can blow through T2 and keep going. I think protecting the low of that 5-minute candle might have made the most sense. In other similar cases I’ve suggested tightening the stop to protect Target 1. That would have worked well in this case.
Here’s the thing to think about. When you look at the chart above, at this moment in time it was impossible to gauge where price was headed next. (Similar to any other point in time). The price action was a little unusual given the fact that it was “CPI day” and you can see the pre-market reaction to the “hotter than expected” inflation numbers. At the point the Trailing Stop got hit (2 points below the Entry) it’s easy to visualize the market heading lower. However that wasn’t the case this time.
But the system worked just as it was designed to do. It got the Trailing Stop to (a little better than) breakeven and made sure a profit didn’t turn into a loss. Heck with T1 +5.75 points away from the Entry, this could have been a good trade for some users. Remember, if you’re trading 3 Contracts and selling 2 at T1, you’re always going to have a respectable gain on the Alert – usually about equal to T1.
I’m going to save the rest for another post, but suffice it to say that there are different ways to trade the system. Purely mechanically works over the series, but it’s not unreasonable to consider using a little discretion here and there based on how the candles (or price bars) look at the time. Pro-actively managing the Trailing Stop on occasion can yield good results. Using a tighter stop than the system (which is designed to perform optimally over the broadest spectrum of market conditions) can make sense. It’s never a bad idea to protect profits and a good rule of thumb is when you have a 12-20+ point gain, that’s when it makes the most sense.
10:00 Economic News Chaos
Last month I talked about trading through the 10:00 “economic news releases”. I posted an example of how it can work in our favor, but also discussed how it’s a double-edged sword. Today was a good example of that. The system was Long going into the news and the negative price reaction caused that Alert to hit the stop. But as you can see on the chart, there was an immediate Short Alert that filled a few minutes later that went on to hit both Targets. So it basically evened out.
As I mentioned last month, I don’t recommend avoiding an Alert that fills prior to a 10:00 economic news release because frequently the market doesn’t have enough of a reaction to make a difference. The times when price does make a big move, sometimes it works in our favor and both targets get hit quickly – and other times it results in a stop-out. But over a long series of Alerts (and news releases) it basically just evens out.
Today was a bit unusual because it demonstrates how the price action following a news release that goes against us can trigger an Alert in the opposite direction that goes on to hit both Targets. There’s a lot to see on that chart, but notice how quickly everything transpired. Five seconds after the Long Alert hit the stop, the system fired off the Short Alert. But it took a full 3-minutes for the Short to “fill” which gave users plenty of time to react.
What’s even more interesting is how close the price came to Target 2 in the 10-15 minutes following the initial 10:00 red candle. And also where the system placed the Trailing stop at 10:06 (the yellow line right above the high of the 10:05 candle). So price was sandwiched in between the Entry and the Trailing Stop for over 45 minutes before it took the next leg down. The second big red candle was also the result of news and happened very quickly. Trump said something about “tariffs” and the price plowed through Target 2 in an instant.
Which brings me to another interesting point. I’ve mentioned this in several places before, but it’s an important consideration when trading the Power Emini Momentum system. Sometimes the price just blows through the Targets and it’s possible (or even likely) you can capture more points than selling at the Targets. In this case Target 2 was at 6078.50 and the 1-minute closing price of that candle that hit T2 was 6062.25. That’s an extra 16.25 points of potential gain if one chose to take a deep breath before pulling the trigger.
I could write an entire article about the choice between setting fixed targets and trading manually, but that’s something I’ll tackle in the future. Suffice it to say that strategy is also a double-edged sword because sometimes a target will get tagged briefly and that’s it. If you didn’t have an order in place you might have missed the chance to sell there. On the other hand, there are lots of times the price blows through the targets and just keeps going, so it’s entirely possible to capture a lot more points selling manually.
To summarize: The 10:00 economic news releases are a consideration and they have an effect on the outcomes of Alerts. I’ve seen enough of them that don’t have much effect on price to suggest it’s better in the long run to go ahead and trade Alerts that fill prior to the news.
Interesting Things On Deck for February
January turned out to be a good month for the ES / MES Momentum System and “seasonally speaking” it gets even better from here.
As we get into February I’ll be using this page to post commentary, notes and charts relating to our trading strategy and whatever else comes to mind. This “notes section” of the website isn’t intended to be a daily recap. It’s more of a way for me to be able to post educational material and examples of our trading strategy to help new and existing users make the most of our system.
Additional Useful Information
Moving Beyond the Trade Setup – Futures Trading Strategies to help Increase our Odds – In-Depth Article
January 2025 Commentary – Notes – Education – Examples
PowerEmini Day Trading Futures – Automated Alert Signals