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.
Holiday Week – Keep Expectations Low
6/30/2025
I live on Amelia Island which is right on the Florida – Georgia border. It’s become a popular vacation spot in recent years. When I first moved here about 25 years ago it was mostly an undiscovered small town where no one even bothered to get off the highway and drive all the way out to the island because there wasn’t much here. Now I basically live in a tourist area.
The reason I bring this up is that we were out and about yesterday meeting friends at the beach on the South end of the island, I noticed tons of people were arriving in all the “rentals” up and down the main beach road. Lots of families are using this entire week as a vacation week. Tourists everywhere – lots of traffic and the beach was already way more crowded than usual. I imagine the grocery store is already packed.
How does this relate to the trading? Well, it’s basically a Holiday “week” because there are only 3 full trading days including today.
In case you didn’t know, this Thursday July 3rd is an abbreviated market session. It’s a 1/2 day of trading and then of course the market is closed Friday for 4th of July. So I’m guessing that many Americans and probably the majority of market participants are basically treating the whole week as a Holiday. I suspected this might be the case and the low volume, sideways price action this morning basically confirmed it.
Dull, choppy sideways, low-volume, low-participation market sessions are the worst type of environment no matter what you’re doing. In all the years we’ve been doing this it’s almost always the same right around 4th of July. The buyers and sellers aren’t in control, the algos are. Most serious traders have checked-out and are already in Holiday mode. Based on the price action thus far, maybe the market should just close the entire 4th of July week. Declare the whole week a National Holiday.
By the way, the Momentum System will be offline on Thursday since it’s a half-day session. Since the Momentum System is designed to play the larger trend moves of the session, when the market closes early there’s a good chance an open trade would get interrupted mid-session or just wouldn’t have time to fully play out. Over the years we’ve always kept the system offline on days the market closes early. Plus it’s highly unlikely the price action would provide much “momentum” for the system to work with anyway.
Which brings me to the next point.
If you’re relatively new to using the software, let me apologize in advance for what’s likely to be “sub-optimal market conditions” this week.
The Momentum system assumes that once the buyers or sellers are able to break price out of the opening range area, there will be enough “follow-through” or “momentum” in that same direction to move the price to the first “easy to hit target”. On days where there’s good directional momentum, price carries all the way to Target 2, which is a significant distance from the entry. The more momentum in the market the better – which holds true no matter what style of trader you are.
Some days the market just drifts and there’s really no momentum to speak of. Choppy, listless, dull, non-trending days are tough to trade no matter what. When price just grinds around in a sideways fashion with random moves out of nowhere for no reason, it’s considered sub-optimal market conditions.
We have no control over that. The market tends to be dull around around Holidays, so keep your expectations low this week.
Why don’t we just shut off the system on days like that? Well that wouldn’t be any fun would it?
Absent any real action or “momentum” in the market, price can still “drift” in a certain direction and hit the Targets. Just like today, the Short Alert this morning eventually hit Target 1 as price just drifted and meandered lower. An hour after the open we got the Alert and 2-hours before the close it hit Target 1. Basically a boring breakeven day. There was a decent rally in the last hour which is typical for the last day of the month / Quarter, but prior to that it was pretty boring.
Imagine what the next couple days might be like?
We could choose to watch paint dry or grass grow, or we could watch the market drift aimlessly in hopes some news hits the wires to create some excitement and real “action”. It’s hard to sail if there’s no wind and there’s no reason to go surfing if there’s no waves.
We might be better off doing things we enjoy, having some fun and preparing for the long weekend. “Go touch some grass” as the new saying goes. Or in my case touch some sand.
Cheers!
Random Interesting Stuff
6/27/2025
In the heat of the day during most market sessions I think of all kinds of interesting things I could write about here. But I like to wait until after the close to post for several reasons. Mainly because it gives me time to organize my thoughts. Some sessions present something noteworthy to discuss and others are just another day in the salt mines or paradise – whichever you prefer. Today I’m just kind of thinking out loud here about some of the things that crossed my mind recently.
Earlier today I was thinking a good topic would be how price sometimes just “rips through the Targets” and I took a screenshot of a 1-minute chart that shows how the price just blew through Target 2 so quickly that it would have been easy to score a few extra points past T2 if one were selling manually rather than setting the sell targets ahead of time.
Which led me to the idea of discussing which technique might be be preferable. But earlier in the week there was an Alert that hit T2 and that was it. The move was over. Price then retraced and if you didn’t sell at T2 you missed out. So there’s no right answer to which strategy is better. There’s something to be said for setting sell orders at the targets and just sitting back and letting the trade play out. But it’s also completely viable to monitor the price action and see if we can squeeze more points out of a trade when it blows past the Targets by selling manually. Both methods are perfectly acceptable.
Since it’s a Friday I figured I’d post the chart because it was interesting how far the Trailing Stop made it past T2 before it got hit.
As I was trying to decide what would be a good topic for today it occurred to me how this past week the “distance to the targets” was quite a bit different than what we were experiencing the past few months. The market has “calmed down” quite a bit as far as the ATR’s but not necessarily the price action. In other words, the intraday market movements can still be wild, but the high to low ranges of the individual candles has contracted lately.
Which then led to the idea of discussing how “market conditions” are so important. And that’s one of the things that doesn’t get the attention it deserves when discussing trading. In other words, it makes sense to adjust our “expectations” based on market conditions. As an example, when the average ATR’s are “tame” we can expect to see the distance to target 1 in say the 3-5 point range. As you probably remember, a couple / few month ago we were seeing Target 1 in the 8-12 point range. I’m not sure I can even generalize about the distance to Target 2, but it’s important to realize that the system is adapting to the current environment.
As we head into July I expect market conditions to be quite a bit different than some months back. I expect we’ll see some really dull low volume days (4th of July is next Friday) but I still expect there will be days where there’s lots of “action”. After all, today’s session was pretty wild because after the market peaked today mid-day, some “tariff news” hit the wire and ES dropped over 50 points and then rallied 40 points into the close. Those were some big price swings considering the morning session was relatively tame.
As I was thinking about how the week turned out overall I realized that Monday and Friday were ideal days where there was just one alert and the price hit both Targets before lunch. I seem to recall that Friday’s are frequently good days for the system. And Tuesday-Wednesday-Thursday this week was unusual because all three days the first Alert of the session hit the Stop and then the second Alert hit both Targets for basically breakevens. For a minute the thought crossed my mind that it might be interesting to do an analysis of which days are typically the best trading days, then it occurred to me that would be a waste of time. Even if the data showed that one certain day was better than the rest, or a certain day tends to get stopped out more frequently, that information would be about as useful as the “3:30” ramp from years ago. Correlations change over time and whatever happened in the past has little predictive value when it comes to certain statistics.
So many times over the years I’ve thought of ways we might be able to “suppress alerts” or have the system skip giving an Alert based on certain criteria or some sort of indicator. But inevitably that would lead to eliminating some big winners. So we err on the side of running it “wide open” and let the users decide if by chance they want to pass on an Alert. That’s why we don’t take it offline on Fed Days. We’re all adults here and capable of making our own decisions.
And all this got me thinking about something else. Remember the title to this post is Random Stuff.
While pondering the reduced volatility it occurred to me that we haven’t seen the 18 point “max stop” in play for some time. Earlier in the year we were seeing that max stop in effect almost every session. So that’s a telltale sign that the volatility, ATR’s and ranges have settled down. And that’s probably a good thing. Those were some high-risk high-reward sessions and not for the fainthearted.
In theory we’re returning to more “normal” market conditions. And it will be interesting to see how that affects July this year. I’m guessing things won’t be nearly as dull as previous years, but I do expect we’ll see occasional dull sessions. Which brings me back to the idea of market conditions and expectations.
Over the years I’ve seen plenty of times during the Summer Doldrums where the market just grinds sideways for hours and it’s like watching the paint dry. When and if you see that it might be a good idea to just close out an open trade and go do something else. I’m just thinking ahead here because there have been a few relatively dull, choppy periods and days here lately. It’s just best to keep our expectations consistent with the price action in any given session.
I have lots more to talk about, but I’ll save it for future posts. Enjoy the weekend!
Why You Should Embrace Break-Even Trades and Break-Even Sessions
6/25/2025
Yesterday and today reminded me of typical Summer sessions. The price action was pretty dull and both days the first Alert of the day hit the stop and the second Alert went on to hit both Targets. The net result of that is… Breakeven.
But that’s actually a good thing and here’s why. I mentioned I’m working on a presentation about how the system is based on “irrefutable mathematics” and employing breakeven trades is one of the concepts.
The quick explanation is this: If we think abut the “potential outcome” of any given trade, most traders will think “win or loss” – a binary event. If we introduce the concept of “breakeven trades” then there are 3 potential outcomes. And only 1 of those outcomes is bad. So mathematically speaking we have increased our odds before we’ve even taken a trade just based on the strategy of employing breakeven trades.
I’ll elaborate and explore that concept more in the future but I think you get the idea.
So as you know, the system looks to get trades to breakeven quickly, when Target 1 gets hit. But it’s important to also realize that concept carries over to breakeven sessions. Basically an Alert that hits both Targets makes up for an Alert that gets stopped-out. So when the market is flaky or choppy like the past couple days, a breakeven day is perfectly acceptable. That’s much better than losing money right?
So what if we skipped the first Alert of the day? After all, the earlier in the session we try to get in a directional move, the more likely it is to not follow-through. Well, we would miss out on days like Monday where the market picks a direction right at the open and never looks back. Price just ripped higher right out of the gate and hit both Targets for +31.00 points in the first half-hour.
So everything is trade-off. Every rule in trading is some sort of compromise.
For example, that’s the reason we don’t use 1-tick stops even though everyone is adamant about using tight stops. We have to compromise and use a stop that’s less likely to get hit. (that’s another topic in my upcoming presentation).
But today I just wanted to bring up the idea of breakeven trades and breakeven sessions since it’s relevant to today. Hopefully the concept and math behind it makes sense to you. It’s one of the strategies that’s gives our system an “edge”. And quite frankly, while everyone always seems to be chasing the Holy Grail trade setup (that doesn’t exist), what they should be focused on is a trading system and strategy that provides a “statistical edge” like the house odds in Vegas.
Here’s a graphic to help reinforce the concept visually.
Keep in mind that doesn’t mean 33% of the system Alerts are going to get stopped-out. It simply means that the “potential outcome” of any given random trade only has a one-third chance of being a loser before we’ve even taken a trade. (instead of 50/50 win or lose).
Statistically speaking, getting trades to breakeven is a strategy that provides an edge, even if one was just randomly going long or short blindfolded.
It’s just math.
Reacting to Price Movement – Purely Objective
6/23/2025
Today was a good example of why trading a “system” is superior to pure discretionary trading or trading based on what we “think might happen”. With all the crazy news and geopolitical turmoil out there it seems like a lot of traders “thought” the market would do the opposite of what it did early on today. I was a bit surprised myself to see the Futures flat near the cash open today. But I’m not sure how many people expected a huge rally right out of the gate.
An automated trading system like the Momentum System doesn’t suffer from any sort of bias and it doesn’t get confused or hesitate. It’s just designed to issue trade alerts based on statistically verifiable market conditions – namely directional price movement shortly after the cash open.
I say this a lot but it’s an important point: The system doesn’t try to predict anything – it simply “reacts” to the price movement. In a crazy news-driven environment like we’ve seen recently that’s a huge benefit. The market frequently does the opposite of what we might expect given the circumstances. Trading pure price action is the best approach.
And in a world where everything keeps getting more and more complicated, the simplicity of the software is refreshing. It doesn’t get much easier than this.
One of the benefits of the Momentum System is that it goes a long way to helping us stay with a bigger trend move when it develops. In other words, it’s not easy to stay in a trade for a +24 point move (Target 2) without having a specific Target like the software shows. Traders tend to get nervous and are apt to sell too soon and leave a lot on the table. 24 points is a pretty significant ES / MES move and seeing that’s the software’s calculated Target helps “mentally” keep us in for the move.
The ATR’s right around the open today were fairly large and so the Targets were further out than they usually are in “normal” Summer trading. Target 1 was +7.00 points and Target 2 was +24.00 points and both got hit in the first 36 minutes of the session. So a 2 Contract MES trader just shooting for the two targets was “done for the day” a half-hour after the open.
That’s kind of another cool thing about the system. It doesn’t always work out like that, but there are quite a few sessions where it’s basically finished before lunch if you’re just shooting for the 2 Targets. We saw a similar session last Monday on Contract rollover day where the market just took off right from the open and hit both targets quickly.
So the point of this post aside from showing how easy it is to trade with the Alerts in the software is to reinforce the idea that trading a “purely objective” system eliminates our human bias and helps us “trade what the market is doing – not what we think it will do”.
Fed Day Turned Out Just Fine
6/18/2025
Today actually turned out pretty good. The main thing was that there was no open trade going into the Fed announcement and the press conference. That’s always best because it’s not a good idea to trade the reaction.
The 1-minute price bar from 2:00-2:01 had a 24.75 point range.
The early Long Alert this morning was viable and I was kind of surprised it got so much traction. The most interesting thing was that it got close enough to T2 that I think it might have made sense to use a tighter stop than the system. The price action from 10:30-11:00 made it pretty obvious the straight up move higher was running out of steam. The 6066-6067 area would have made for a better discretionary stop.
The reason I say that is because the market basically went straight up from 9:40-10:40.
The system has to be sort of “universal” to deal with any type of environment. So the system trailing stop moves today were reasonable based on the levels. One of the main discretionary tactics is using a different (tighter) stop than the system (on occasion) when it makes sense based on the chart – and this was a good example of when we might consider that.
Here’s the chart and I drew a red dashed line at the level I thought would have made for a good tighter stop based on what I mentioned above.
I included some of the pre-market because it was interesting how the Range low lined up with a strong support level. You can see the chaos that ensued after the Fed announcement and Powell’s press conference and why I suggested to avoid it in the event the software gave an alert or was in an open trade (which it didn’t and wasn’t).
I got a question from a user that goes right along with my comments from yesterday about avoiding trading over the Fed Announcement. It was concerning when one might want to skip a trade because either the Alert price or the “fill” might be “way too far away” from the Range.
My answer was that it’s not so much about the distance between the Range and the Alert Price – what’s important is the distance between the Trade Barrier and the “potential fill”.
If it looks like the Entry Confirmation (fill) is going to be WAY WAY WAY past the Alert Price you want to be cautious. And it’s pretty rare when that’s going to be a consideration and actually matter. Fed announcements are when that comes into play as an example.
If you got a Long Alert and in the 1-minute we were waiting to get filled the price rallied up another 50.00 points, you wouldn’t want to take a fill fifty points higher than the Alert Price right?
That’s a hypothetical example to help drive home the point.
In other words, say today’s Long Alert was 6051.75 and all of a sudden there was news that caused price to spike up 10-20 points and the 1-minute closing price of the “Entry” candle was going to be 15 points over the Alert Price / TPB. That’s a case where it probably makes sense to pass on the trade.
And that’s why it not a good idea to trade over the Fed announcement.
For example if there was a second Long Alert pending going into the announcement today at 6051.75. The 1-minute candle following the announcement closed at 6065.50 which would have given the system a fill 13.75 points past the Barrier, which is not ideal. That would have been past where Target 1 was and halfway to T2.
So the idea is that we probably want to avoid a “fill” WAY past the Alert Price.
But it’s not something set in stone. In a volatile market it’s not uncommon for the system to get filled 3-4-5 points past the Alert Price, but something in the neighborhood of 10+ points there’s a good chance of a snap-back. Just like we saw in the minutes following the Fed announcement. Those type of moves are typically based on news unless the session is seeing 10+ point ATR’s on the 5-minute candles.
Generally speaking a fill 5 points or less past the Barrier is not something to be concerned about. I think earlier this year there were one or two that were pretty far away, but as you recall the volatility was extremely elevated a couple months back. So I wouldn’t really be too concerned about it except on Fed Days and any time there’s a sudden extreme move based on news.
Immediately following Fed announcements we tend to see price chop up and down in extremely wide ranges and that’s why it’s best to just avoid the afternoon session. Today it didn’t matter so things turned out for the best. Target 1 got hit +7.00 points over the Entry and the Trailing Stop got hit +3.75 points over the Entry and that was a wrap for the day.
Tomorrow is Fed Day – To Trade or Not to Trade?
6/17/2025
I’ll start with the answer: We don’t recommend holding an open trade into the Fed Announcement at 2:00.
Fed “interest rate announcement days” are tricky. Over the years I’ve seen just about every possible scenario play out.
When I say not to hold an open trade through the actual announcement, that assumes there’s an open Alert that’s still in progress. That’s not always the case. As you know, the system will most likely fire off an Alert early in the session just like it does every day. It’s possible that Alert hits one or both of the Targets and could be a viable trade. But typically on Fed Days the price action is dull and choppy in the morning and neither the buyers or sellers are “committed” enough to drive price significantly in either direction.
So while there’s usually an Alert early in the session it’s probably not as likely to get good follow-through.
Then there’s the matter of whether there’s an active Alert or open trade when the Fed announcement hits the wire at 2:00.
We definitely don’t recommend holding over the announcement. It’s a coin flip on which direction the market goes initially so it’s either going to hit the stop or the targets quickly and there’s really no edge. The immediate reaction is usually just kind of “price chaos”.
It’s fun to watch how the system reacts when the announcement hits the wires but we don’t recommend trading it. In the past we’ve seen Alerts that trigger-in WAY past the Alert price. We’ve seen Alerts that take an Entry and hit both Targets and the Trailed Stop in the same 1-minute candle. And basically any combinations of possible outcomes can happen so fast there’s not really time for the system or us humans to react. It may or may not be as chaotic this time but I think you get the point.
Then at 2:30 when Powell starts speaking the price tends to be all over the map based on what he’s saying and maybe there’s a big directional move, but it’s usually just not worth the risk. It’s a crapshoot.
I think it’s probably best to just plan on avoiding the session altogether as far as the Momentum System unless the morning session looks like it’s presenting a slam-dunk. With all the news and geopolitical stuff out there right now the market is kind of choppy anyway.
And then we have the Juneteenth National Holiday Thursday…The system will be offline.
So we’ll see what Friday brings. That’s when the dust will settle just in time for the weekend.
Contract Rollover Day – September 2025 Contract
6/16/2025
Most of the trading platforms have standardized Contract Rollover days in the past year which is a good thing. Both Think or Swim and NinjaTrader now roll over on the Monday following the new Contract being available.
Prior to the standardization it was always a point of confusion and that’s why several years back we added the current Contract in the Alert Software. Even still it’s not unusual for me to get an email saying the software doesn’t match the prices on the chart. So I figured today would be a good day to bring it up so there’s no confusion going forward.
The very first line in the Alert Software System Notes each day displays the date and the current Contract the system is trading.
I marked where the “current Contract” is displayed in the software on that first line in the System Notes. It’s really only a point of potential confusion several times a year for a couple days, but this should clear things up going forward. And it helps that the platforms have pretty much standardized it too.
Dull Narrow-Range Summer Session
6/9/2025
Today was a taste of Summer trading. Some are trading – some are not.
But seriously, this reminded me of what might be a typical day in July or August when the volume and participation are low and the market acts extremely dull. What was really unusual was the fact that no Alerts triggered-in until almost 1:00 eastern, which is highly unusual. Might be the first time all year for that.
It was a narrow-range “doji day” and it wasn’t hard to tell by mid-day that it was highly unlikely anything exciting was going to happen. The system did give a Long Alert that came within 1 point of hitting Target 1, but it just kept poking at the highs of the day and getting turned back each time.
The Long Alert actually appeared completely legitimate as it was given at the level just above the pre-market and early session highs. There was some halfway decent “momentum” at the time. But it was short-lived and the rest of the session the market just kind of drifted randomly between the Alert price and Target 1. Then in about the last 20-minutes they sold it down.
Notice that the distance to Target 1 was 8.75 points which was a bit excessive given the price action. In “summer conditions” it’s more common to see T1 in the 4-7 point range. But the bigger picture likely came into play today as the market itself has had a significant rally off the “panican lows” from April and it’s running into resistance. Right at the big round number of SPX 6000. Today was a consolidation day and there wasn’t any real news to move it much in either direction.
It wouldn’t have been unreasonable to use a little discretion today. I talk about skipping alerts on occasion and given the dull morning and the fact that almost every session sees an alert that fills early-on, it may have been a good day to skip. The other thing that seemed viable was to just close the trade early somewhere in the 2-hour window that price spent between the Entry and Target 1. Even about a half-hour before the close would have been a good place to just close it around breakeven and call it a day. It seemed fairly apparent that the highs were in and price was rolling over.
I always talk about how we have to trade what the market decides to serve up and this is what it gave us to work with today. This is the S&P 500 daily candle at the close.
While we are technically in the Summer season, we’re not in the “Dog Days of Summer Doldrums yet”. Sessions like today are more typical of July or August, but we got a small taste of what we might expect down the road. But I think we’ll see more decent action before that. Today was just a bit unusual.
Every Market Session is Different
6/4/2025
I started writing this post today shortly before noon eastern time and changed it a few times during the day. I originally wrote “If I had a switch to shut-off the ES Momentum System early, I’d do it right now.” That was at about 11:45 this morning.
That’s because the morning session was just not conducive to trading. It was choppy and range-bound and the price just meandered up and down with no trending action at all. Sideways choppy days are hard to trade and are the worst. My next comment was “based on the price action so far it would be a good day to go out to lunch and then do something else”.
Several Alerts fired off in both directions early on that never filled, but a Short Alert did trigger-in right after the reaction to the 10:00 “economic news”. It hit Target 1 and then the tightened trailing stop. But basically the entire morning session was just a lot of sideways chop and there was no real directional follow-through.
Not every day is a good day to trade. And that’s a function of the market and the price action itself. We have no control over that.
So as I was writing this morning, figuring I’d get an early start to this post and maybe take the rest of the day off, another Short Alert triggered-in right at noon time. That’s when it occurred to me that I should continue to wait until after the close to post these notes. That’s because anything can happen at any point during the session and I don’t want to post an opinion that might affect someone’s trading decisions. In other words, at the time I thought it would be a good time to suggest quitting for the day, but I had no idea if anyone would read it that early. Also I didn’t want to cause a missed trade that might have gone on to work just based on my personal opinion.
The second Short also hit Target 1 and but didn’t get much subsequent follow-through either and hit the tightened Trailing stop.
At that point I realized it’s best if I wait to see how the session plays out before posting here. Unless it’s a post that’s not related to the current trading session. I plan on doing some of those this month. A user emailed me to say he was looking forward to more “strategy and educational” material and that’s definitely on the agenda. I always say this isn’t intended to be a daily recap, but a lot of the concepts and educational type stuff enters my mind based on how the session transpired.
There was a late session Long Alert that got filled but price reversed and it went on to hit the full stop. The funny thing was that this morning there were a couple Long Alerts that didn’t fill even though price poked above the Barrier several times. I was going to use that as an example of why the system waits for a 1-minute close past the Barrier, but it didn’t work for that late day Alert. Like any good strategy, it doesn’t work every time. That’s just the nature of trading. Based on the chart and the prior price action, my “opinion” would have been to pass on that late session Alert.
Here’s the chart – what a mess.
I included some of the overnight / pre-market because some of the price action and “zones” seem relevant. It’s interesting that the top of the Trigger Range and the Long Alert level were just above the top of the pre-market “chop zone”. I shaded that as a resistance zone during the regular session and I think you can see why it might have made sense to be skeptical of the late-day Long Alert.
There’s actually a lot more that comes to mind when I analyze today’s session, but I don’t want to cram too much into this one post.
Let me finish with this concept.
Over the years we’ve wrestled with the idea of “suppressing alerts”. We could filter out and eliminate certain alerts using various indicators or patterns. But when we do that and test it, the result is that it eliminates some Alerts that go on to hit both Targets. Imagine missing out on yesterday or the day before because some filter logic said “this alert might not work out”. So we have chosen (thus far) to err on the side of letting the system give an Alert every time the specific conditions are met. We think it’s better to run it that way and let the user decide if they want to skip an Alert here and there.
Just like we leave it running through Fed Announcements but we highly recommend avoiding trading at that time. The system is a “tool” and can be traded in any number of different ways. It’s designed to be universal in that it’s able to handle any type of market session and price action. It’s adapted well over the years through all different types of market environments. But there’s always a little room for user discretion and I think that makes it even more flexible.
A Solid Trend Day – Interesting Levels
6/3/2025
I wanted to point out something interesting as far as the Long Alert Entry level today. I know a lot of traders keep an eye on the previous days high and low levels and they can be useful in certain situations. But this morning the ES / MES Momentum system gave a Long Alert right around yesterdays highs and the “fill” on the Alert was literally at the exact bodies of the candle highs from yesterday. What a coincidence.
It was a textbook breakout!
On the chart below the thick green line is the Trigger Range high. The dashed horizontal line is the Long Alert Level and the thin green line just above it was the Entry level for the trade.
What an interesting coincidence. And the bigger picture pattern is unusual too. It seems like that breakout over yesterdays high was the spark that ignited the significantly persistent rally.
It was an unusually strong trend day as we see on the zoomed-in chart below. Notice how choppy the price action was in the first 45-minutes.
Once price cleared all that early congestion it was off to the races. I took that screenshot right near the highs of the session and you can see the Trailing stop eventually got hit up there at 5979.50. It was the second strong trend day in a row, but under the surface it was quite different than yesterday.
The ATR’s were smaller. And the system took that into account.
Yesterday Target 1 was 8.50 points from the Entry and Target 2 was 28.75. Today Target 1 was 5.00 points form the Entry and Target 2 was 17.25.
That’s what we mean by “adjusting to current market conditions”. As I’ve mentioned, the Stops and Targets are a function of the real-time ATR’s, ranges and volatility and that’s what makes the system so adaptable to various market environments. The distances to the Targets today was pretty much what I’d call normal market conditions, as opposed to yesterday.
One last observation about how things played out today. During all that early “chop” the system gave 2 Long Alerts that didn’t trigger-in before the third Long Alert finally did – almost an hour into the session. As you know, not all Alerts will actually trigger-in / fill. When price appears to be breaking out of the Trigger Range but then reverses and starts exploring the opposite side of the range, the Alert can disappear. The system is basically resetting itself when that happens. The mid-point of the range is the software’s reference point for that.
Strong trend days like today offer the opportunity to be a little more pro-active with your Trailing Stop. In other words just based on the chart above it would have been feasible to use a tighter discretionary stop up around Target 2 and perhaps score additional points. Days like today the Aggressive Protection Level seemed like a good choice.
Trend days like today are relatively infrequent but we can see that “trading the primary directional trend of the day” worked out well.
A Great Start to June
6/2/2025
There were two “filled” Alerts today, a Short and a Long. The Short hit Target 1 for +8.50 points and then tagged the Trailing Stop which had tightened to just -2.00 points from the Entry. Then the Long Alert triggered-in just before Noon and hit both Targets. But the crazy thing was that Target 2 was hit just 2-seconds prior to the 4:00 close. That’s pretty crazy right?
That Long Alert scored a total of +37.25 points assuming trading 2 Contracts at the exact same numbers as the software provided. That seems like a good way to start off the new month since today was the first trading day of June.
The Trailing Stop on the Long Alert tightened 7 times between the Entry and the close and was never hit. You can see the final level at the close marked on the chart.
It was a pretty volatile day as you can see by the 5-point increments on the chart scale and the first hour of trading had quite a few 5-minute candles with 15-18 point ATR’s. But one of the interesting things to note on the chart are the two areas I shaded in white rectangles. Those were consolidation zones and you can see how the first one formed in the pre-market and how the early Short Entry coincided with a break below that zone.
The second shaded white rectangle encompassed about 18 points of price action and it’s interesting to see how the Long Alert was given just as price started breaking out of that zone. While there was a bit of subsequent consolidation back into the Range, the stair-step pattern that followed was fairly “textbook”. Price basically stair-stepped higher and it took about 2-hours to hit Target 1.
The funny thing about price is that it does what it wants and we have no control over how the price action manifests. Every session is different. I could generalize and say that typically Target 1 gets hit relatively quickly under normal circumstances, but you can see that today the price just meandered around a lot and eventually “drifted” to the Targets.
Understanding that the outcome of every trade depends entirely on the levels of Momentum (and that momentum can increase or decrease in the blink of an eye) will help you to become a better System Trader. Remember the job of the Momentum System is to alert us to the Breakout Areas based on a set of predefined criteria. The follow-through and the success or failure of any given trade will be related to the strength of the Momentum in the market after we take our entry. The fact that the system is trading with the primary directional trend at the time also helps.
I had a question today about trading through “news events” and while I have discussed it here in previous months, I should probably revisit the subject. In a nutshell, the system does not care about news and simply reacts to the real-time price action as it’s unfolding. Over the years most “market moving economic news” tends to get released in pre-market and the 10:00 (eastern) news releases don’t generally have a big effect on price (for the most part). So the system doesn’t take any news into account which is honestly a good thing. It’s strictly reacting to price action. If we’re in a trade and “breaking news” has a significant effect on price, then it’s possible that the the Stop or both Targets could get hit quickly. On a long enough timeline it all evens out and I don’t recommend avoiding an Alert just because of impending news or the possibility that someone important might say or Tweet something.
Yes, this current environment is a little different. As I’ve pointed out, it’s not a stretch to call this a “news driven market”. Between Fed speakers and Tariff News from the administration and all the other potential Breaking News items that could hit the wire at any moment, it’s nice to know the Momentum System is purely objective. All that matters is price.
Trailing Stops Are the Key to a Successful Trading System
6/1/2025
Everyone recommends using tight stops. So why don’t we just set our stops at 1-tick? Because that guarantees that our stops will get hit every time (try it). So in theory the ideal stop placement provides just enough wiggle room so we don’t get knocked out of a trade by normal price fluctuation and minor counter-trend moves. But we also want the Stops to be tight enough so we don’t take big hits when a trade goes against us. Placing and managing stops is the cornerstone of the Momentum System.
June Should Be Interesting This Year
Over the 8-years since we first started developing the Power Emini software, June has traditionally been a good trading month, but a prelude to the “Summer Doldrums”. However in 2025 I expect things to be a bit different than usual. In past years July and August tend to be really dull and things slow down a lot. The Dog Days of Summer typically see lower participation and volume and people go on vacation and a lot of sessions end up boring. I remember times when the entire days range would be less than 10 ES points and catching a 3-4 point move was considered a good trade.
But this year I’m not sure what to expect. So far this year the market environment has been anything but normal. The persistent increase in volatility has been atypical and the day to day market ranges and ATR’s have been incredibly high compared to past years. And as I’ve pointed out here many times, this is primarily due to the “news cycle” that we’re in. It’s not uncommon to see enormous point moves in MES out of the blue when some breaking news hits the wires.
The constant “tariffs and trade war” saga has resulted in a sort of dysfunctional environment where anything can happen at any time. It’s like a soap opera with frequent twists and turns and that affects price almost on a daily basis. However the Momentum System is designed to “react” to the price action that’s currently unfolding rather than trying to “predict” anything so its logic is able to deal with this unusual market environment.
But as I’ve pointed out, this news-driven price action results in more of a high-risk, high-reward environment. I expect that to continue this month.
As we get into June I’ll use 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, 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 our trading strategy to help new and existing users make the most of our system.
This month I’m going to try and include more “strategy” and trading concepts type posts. I mentioned last month that I’m working on a new presentation that is centered around “using scientific and mathematical” concepts in trading and how these strategies are built-into our system. These ideas aren’t really apparent at first glance so I want to explore those concepts more here.
I’m looking forward to June and hope you will continue to take a little time here and there to keep up with the material I’ll be posting here.
Additional Useful Information
Moving Beyond the Trade Setup – Futures Trading Strategies to help Increase our Odds – In-Depth Article
May 2025 Commentary – Notes – Education – Examples
PowerEmini Day Trading Futures – Automated Alert Signals