Power Emini Commentary – Notes – Education – Examples
This is 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.
The Tradeoff That Comes With Tightening Stops
6/1/2026
So to start off June there was one Long Alert that filled and hit Target 1. The Trailing Stop tightened and a subsequent pullback knocked-out the trade. Then price reversed and headed back up and eventually hit Target 2 and then some. But the trade was closed when the tightened Trailing stop got hit.
So here’s the dilemma. If the Stop hadn’t tightened after Target 1 got hit, the system would have stayed in this trade and rode it all the way to Target 2. But this is just one Alert. In similar situations which we’ve seen plenty of times, the price could have just as easily reversed and gone all the way back to the bottom of the range and even continued a lot lower.
So the dilemma is whether to tighten the Stop as price moves in our favor or just leave the initial stop in place and hope the market continues in the direction of the filled alert. You know what I’m going to say. “Better safe than sorry”. One of the cornerstones of our strategy is “getting the stop to breakeven quickly”. That reduces risk and eliminates the possibility of a loss.
Sometimes that thwarts a trade that would have worked out, but other times it prevents a profit from turning into a loss. We firmly believe the latter is preferable.
Here’s the chart that shows how it played out
The thing to realize is that every Alert that hits Target 1 is a winner and there are several reasons why. I wrote an entire post about that last month. If you look at the distance between the green dashed line (Entry) and the Trailing Stop (yellowish line) you see they are about the same. That’s where the stop tightened to breakeven after T1 got hit.
Its not uncommon for the Trailing Stop to tighten and get hit and then the market eventually resumes its move in the direction of the trade. It’s also not uncommon for price to hit Target 1 and then reverse completely.
There’s a difference between a counter-trend move and a full-blown reversal. The system attempts to keep the Trailing Stop far enough away from the price action to stay in a trade through a counter-trend move and normal price fluctuation. But if the move in the opposite direction is significant enough, the stop is going to get hit, as it did here.
That’s precisely what we want because when that happens the worst case scenario is a breakeven trade (assuming trading 2 Contracts). As you know “just shooting for target 1” is also a viable strategy and in this case that turned out as a winner. And once a winning trade is closed there’s no reason to worry about what price did afterwards.
The reason I mention that is we have a new user that is doing a “test” for the first month. His strategy is to trade every Alert and sell at Target 1 or the Stop, whichever gets hit. It’s going to be an interesting experiment. I’m going to discuss this more as the month goes on because there’s a lot more to trading this strategy. But with the high hit rate on T1 I’m almost certain he will end up with a high win rate and a profit.
Welcome To June – Time Flies
It’s hard to believe it’s already June. And it’s hard to believe how long this news cycle about “peace talks with Iran” is dragging on. Last month I mentioned several times how the news was kind of a wildcard lately and as we head into June not much has changed with that.
It’s fairly normal for various news items to affect the price action. If you’ve been around a while you know there are plenty of times where “breaking economic news” at 10:00 can cause price to move significantly one way or another. But the past couple months we’ve seen more than enough breaking news items randomly hit the tape related to the war with Iran. It’s getting tiresome but it is what it is.
The thing about breaking news is that it adds an element of randomness to trading. Typically economic news is released on a schedule and even though it’s not always apparent how the market will react, there is some structure to it. But we’re in an environment where at any moment it seems, something can hit the wire that causes price action to spike in one direction or the other. Honestly it’s not that big of a deal because if we’re in a trade there’s just as much of a chance that the reaction works in our favor and causes an open trade to hit both targets. But the opposite is always possible too.
So it’s not really an issue but it’s something that’s affecting price almost on a daily basis. The news flow is creating a lot of random moves out of the blue and tends to make the price action more erratic at times. With the market up at all-time highs and the recent astounding move higher, what this market needs is a significant sell-off. That would likely lead to more trending price action and probably turn the environment more favorable for the system.
As we get into June I’ll use this page to post commentary, notes and charts relating to the Momentum System 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 the perfect format to post educational material and examples of our trading strategy for the benefit of new and existing users to help make the most of the system.
Additional Useful Information
Moving Beyond the Trade Setup – Futures Trading Strategies to help Increase our Odds – In-Depth Article
May 2026 Commentary – Notes – Education – Examples
PowerEmini Day Trading Futures – Automated Alert Signals