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.
Tips For Trading In Extremely Volatile Market Conditions
6/10/2026
Take a look at this screenshot of the Alert Software from this morning.
The first thing to notice is the “Traction” on this Long Alert where I drew the orange rectangle. What it’s showing is that the trade took -17.25 points of “heat” (negative price excursion) before price turned back up and moved +34.50 points above the Entry.
Both the negative traction and price hitting Target 1 occurred in the same 5-minute candle to give you an idea of how volatile the market was this morning. That 5-minute candle had an ATR (range) of 29.50 points. The candle before it had a range of 38.00 points.
As you know, the ES / MES Momentum System has a “fixed maximum stop” of 18.00 points. When the market is extremely volatile and the ATR’s are huge, that max stop comes into play and provides a maximum risk on any one given Alert. Now 18.00 points may seem like a lot, but these days with ES in the 7,000’s it’s not because it’s all relative. The 5-minute ATR’s the first half of the session today were averaging about 20 points.
So back to how this Alert played out… and some ideas on how to deal with this type of volatility.
Target 1 got hit quickly as we see in the time stamps for +11.00 points. That was double what Target 1 was yesterday because of the larger ATR’s and ranges. +11 points in 3-minutes ain’t bad and honestly that could have been the trade of the day for some people. There’s absolutely nothing wrong with taking a quick gain at T1 and calling it a day in extremely volatile market conditions.
Target 2 was 36.75 points above the Entry. That’s HUGE and much larger than normal and price didn’t quite make it. Price came within 2.25 points of the T2 and then turned back down and hit the tightened Trailing Stop which had tightened to just 2.00 points below the Entry.
So this first Alert could have been played several different ways depending on the number of Contracts traded.
1 Contract – just shoot for Target 1 = +11.00 points
2 Contracts shooting for both Targets = +9.00 points
3 Contracts – sell 2 at T1 and shoot for T2 = +20.00 points
But there’s another option. And this is what I recommend for 2 Contract traders on extremely volatile days (when the max stop is in play).
Here’s the rule: When price gets close to Target 2 and Target 2 is 30 or more points protect 20 points of that gain
“Close to Target” 2 could be say 5 points.
The idea is this – and I’ve mentioned it several times in the past here. When you have a 25-30+ point gain and price is within spitting distance of Target 2, protect the majority of those profits. Don’t let price go all the way back to the “breakeven” Trailing Stop. It’s a pretty simple concept.
We’re thinking of programming that logic into the software, but until then it’s basically a “rule of thumb”. It sounds simple enough to hard-code so we’ll see. One issue is the speed at which price moves in these types of sessions. There were periods today where price was moving 5 points a tick. And when the ATR’s are 20-30+ points every 5-minutes, 10-point moves can happen quickly.
If you read yesterday’s post it’s funny how I mentioned how accurate T2 tends to be but how sometimes price gets within “spitting distance” but doesn’t quite make it. And then today that’s exactly what happened.
And then guess what happened next?. Price broke down hard and there was a Short Alert that hit the max stop. And just like I mentioned yesterday, the reason was that the max stop was “too tight for the price action”. Crazy right? But basically the Short Alert triggered quite a ways below the bottom of the Range and the initial max stop started below the bottom of the range and got hit quickly.
But here’s the crazy part. Price never even bounced back to the mid-point of the range following that and hit the Target 1 level shortly thereafter. If there was no “fixed max stop” that trade would have worked. But as you know and as you can imagine, we have to draw the line somewhere. We’re seeing insane point moves in some sessions and 20-30+ point stops don’t make sense either.
As I’ve mentioned, our testing revealed that 18 MES points was the optimal maximum stop for the system based on years of data. And like I said, sometimes that’s just too tight for the price action. But over the long run it’s the ideal number and only comes into play when the market is insanely volatile.
To give you an idea of why I’ve been saying 18 points is fairly nominal in volatile sessions, take a look at the ranges today mid-day right after the Short. The bars at the bottom of the chart show the range of each 5-minute candle.
That’s what it looks like when the market is moving sideways in a 40 point range.
And the last thing I want to mention is that second Alert would have been a good one to skip altogether. I know that sounds weird but that’s always an option too. As I was watching how price approached the bottom of the range and broke through, I thought to myself “If I had a button to manually suppress an Alert I’d hit it now”. It was one of those Alerts that just didn’t seem “high probability” based on the price action and the fact it triggered so far away from the range. Also also the fact the ATR’s all morning were greater than the max stop.
Anyway this should get you thinking about perhaps using a wee bit of discretion at times. Honestly a hybrid approach of trading the system mechanically most of the time, but using some common sense discretion during periods of extreme volatility works best. That should make sense.
One and Done – Both Targets Hit
6/9/2026
Today was a pretty wild day. As I mentioned here previously, the market has entered a period of “range expansion” and the intraday volatility has picked up a lot. That’s typically good for the Momentum System but we have to realize that these type of conditions mean more risk – and more reward.
So this morning there was a quick “impulse move” higher that triggered a Long Alert just 8 minutes into the cash session and hit both Targets.
Since it happened so quickly the 1-minute chart shows the best view.
There’s a couple important things to think about looking at that chart.
The first is the accuracy of the Target 2 level in this case. After all, when setting a target ideally you want to squeeze as much out of a move as possible while still placing it at a level that will get hit. Today it was at a perfect level for this impulse move. Mostly a coincidence because sometimes price will come within spitting distance of T2 but not quite make it.
The second thing to consider is what happened after the Targets got hit. The market reversed and sold off hard for the first half of the session. Had price not hit Target 2 on the Long, there would have been a Short Alert that would have easily hit both Targets. It would have triggered-in on the second to last candle on the right side of the chart.
But the Momentum System is designed so that “once both Targets get hit and price hits the (tightened) Trailing Stop, the system goes offline for the rest of the session”.
There are actually several reasons we have it programmed like that.
First, when Target 2 gets hit the price is typically so far away from the Range that it’s highly unlikely there would be another Alert anyway. The majority of the time that’s true and most sessions when T2 gets hit the price never goes back into the range.
Second, when both Targets get hit it’s considered a “big winning day” and there’s no reason to stick around and risk giving anything back. There’s several analogies I could use but I think experienced traders will understand that overtrading is one of the traps that hurts performance.
And third, there are lots of times when it’s nice to be “done trading before lunch”. That frees up the rest of the day to do other things. Over a long period of time there will be plenty of days where the system is done early, but that’s really a function of the market and how the price action plays out. We don’t have any control over that obviously. But those of you that have been using the system for a while know there are plenty of days where the alerts play out in the morning session and that’s it for the day.
A day like today, even if the first Alert didn’t hit both Targets, the second one would have hit both targets before lunch. Sometimes these early impulse moves only carry price to T1 and sometimes they get stopped out on reversals. But typically when there’s a reversal and a trend move in the opposite direction the system will catch that move too. That’s one of the benefits of trading this strategy.
When there’s a significant directional move off the open the Momentum System always gets us in for the move. How things play out from there is a function of how the price action manifests from there.
Today turned out well. And I expect more “action” going forward.
Serious Range Expansion with Huge ATR’s
6/8/2026
Last week I mentioned that the big sell-off we saw Friday was likely to kick off a period of increased volatility and boy did we see that today. The 5-minute ATR’s were huge and that matters because that’s essentially the timeframe the Momentum system is keying off of.
The opening 5-minute range was a whopping 24.50 points and for the first 30-minutes of trading the ATR’s were averaging around 15 points every 5-minutes. Because of that the max stop was in play and on the chart you can see it was exactly at the mid-point of the Range. Needless to say the first Short Alert hit that stop quickly when price snapped-back following the opening drive lower. Shortly thereafter there was another thrust down that came fairly close to Target 1, but it didn’t matter – the volatility had already knocked-out the trade.
The second Short Alert hit Target 1 for 11.75 points and when the Trailing Stop tightened it got knocked-out by one lousy tick. On the chart I marked Trailing Stop 2 at 7447.00 and the high of that candle was 7447.25. Sometimes a tick makes a difference and it’s unfortunate because today would have turned out as a basically breakeven day had that trade stayed open until market close.
But there are a couple important things to consider about sessions like this. First is when the 18 point max stop is in play, it’s an altogether different environment than normal. Especially given the fact that the initial stop started off at the mid-point of the range. That’s highly unusual. The reason that in “normal market conditions” the system doesn’t set the initial tight stop at the mid-point of the range (rather than the opposite side of the range) is that… The tighter the stop the more likely it is to get hit.
I say that a lot but it’s a mathematical fact. It’s a very important concept to keep in mind and it’s the same reason we can’t use a 1-point stop when the price is gyrating up and down 15-points every 5-minutes. Over the past couple years I’ve talked a lot about this and basically the way the system is programmed is to give price plenty of wiggle room initially when an alert fills. Then it tightens the stop quickly one we get some movement in our favor. As I mentioned in a previous post, the initial stop always starts 1-tick past the opposite side of the range because that’s the logical place where a directional move is “invalidated”.
But when the ranges and ATR’s are HUGE we want to / have to draw the line somewhere and 18 points quants out the best. If the system didn’t have that max stop that first alert would have poked out of the top of the range 30.25 points above the Entry. That’s why the max stop makes sense.
We have a section in the Help about trading in extremely volatile markets and one of the suggestions is to trade just one Contract and shoot for Target 1. And I’ve mentioned that some users just shoot for Target 1 and we even have one new guy that’s doing a test this month with that strategy. The reason I mention it is that the result today would have been an -18.00 stop out followed by a +11.75 point gain and honestly that’s not too bad an outcome considering MES had over a 70 point intraday range and was basically “all over the map”.
After a stellar week last week I expected some volatility and that’s what we got. The system has had an exceptional hit rate on Target 1 the past couple weeks and when that happens there’s always a stop-out lurking around the corner. But when the ATR’s are larger than normal, both the risk and reward expand.
With CPI and PPI this week and Contract Rollover at the end of the week I expect the volatility will continue to be elevated.
Huge Trend Move
6/5/2026
The post I did yesterday was about the difference between an impulse move and a trend move. And interestingly enough today we got both.
The impulse move was similar to Wednesday, where both Targets got hit very quickly. That turned into a huge trend move that lasted all session. The Short Alert stayed open for the whole move and the Trailing Stop was never hit today.
Here’s a screenshot of when price hit T2. It’s a 1-minute chart so we can see how quickly things transpired early-on.
As you know we recommend you follow the Momentum System on a 5-minute chart after an Alert fills, but the 1-minute makes it easier to see how the time stamps in the software (superimposed on the chart) match up to the levels.
Interestingly enough, right after T2 was hit the price rebounded back up to the Target 1 level. That’s what we call a counter-trend move. And the Trailing Stop was hanging back enough to keep the trade open. When the downtrend resumed it was one for the record books.
Take a look at the “Traction” display in the Alert Software later in the session.
The “Traction” shows the maximum negative and positive price excursion from the Entry. So after this Alert triggered-in it took -2.75 points of heat and at the low of the session price had moved +158.50 points below the Short Entry level. And as I mentioned, the Trailing Stop was never hit going into the session close. It tightened 27 times in total and that’s highly unusual.
But today’s session was highly unusual. It was the biggest sell-off in a long time and the good news is that a move like this typically kicks off a period of more “action” in the markets.
It’s funny – last weekend I created this new “June Notes” page and you can see down below where I made the comment “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.”
What we’ve seen the past few days was kind of what I had in mind when I wrote that. There were 5 Alerts this week and all 5 hit Target 1 and 3 of them hit Target 2 because the market served up some good trending price action. The ATR’s and ranges have picked up too and it’s likely that overall market conditions are shifting toward more volatile sessions.
Next week should be interesting. Enjoy the weekend!
Two Vastly Different Trades – Same Outcome
6/4/2026
June is off to a pretty good start. Four sessions in, the system has given 4 Alerts and they all hit Target 1. Two of them hit Target 2 as well and I wanted to show you how vastly different things can play out using the past two days as examples.
Here’s yesterdays chart right after T2 got hit.
The dashed red line shows the level the Short Alert filled and we see price hit Target 1 in the very same 5-minute candle. It plowed through Target 2 on the very next candle. That’s an example of serious forward “momentum”. This Alert only took -1.25 points of “heat” or negative Traction which we can’t actually see on the 5-minute chart but basically it was a straight shot to both Targets and everything played out very quickly.
The next example is today’s chart shortly after T2 got hit.
In this example price took a whole different type of “approach” to the Targets. This is what I’d call a Trend Day as opposed to the way things played out yesterday which was more of an “impulse move”. Same outcome but completely different price action.
Today’s Long Alert actually took -13.25 points of heat or negative Traction. Two candles after the Alert triggered-in we see that pullback to the exact mid-point of the range – to the tick.
But here’s something to keep in mind and I’ve discussed this here before several times. That 13 points of “heat” is nothing when ES is in the 7,000’s. Heck 10-20 points these days is just normal price fluctuation. This chart demonstrates why we don’t want to use too tight of stops initially. Imagine getting knocked-out of this trade because the initial stop was too tight and then watching that huge directional move unfold.
As you know, the initial stop always starts off 1-tick past the opposite side of the range because that’s the “logical spot” where the directional move is invalidated (typically). The only exception is the 18 point max stop because we have to draw the line somewhere and that’s the optimal max stop according to our testing.
But I don’t want to get too far off topic here. The main point of these examples is to show “how a trade plays out” is largely a function of the price action. The system is playing directional moves using the Range as a reference point. When price escapes the range in one direction or the other, the system starts looking for a potential trade in the direction of the breakout.
The first two sessions of the week prior to today, there was enough forward momentum for price to hit Target 1, but the Trailing stop tightened and knocked-out the trade due to volatility and the fact the stop tightened. But that’s ok because the strategy is to reduce the risk on a trade as quickly as possible by tightening the stop when Target 1 gets hit. Sometimes that means the tightened stop is too tight for the subsequent price fluctuation or counter-trend move.
The tighter the stop the more likely it is to get hit That’s a Law of Physics and should make perfect sense.
The system is playing the odds over a long series of Alerts and we can see that sometimes a quick impulse move gets price to the Targets and other times it’s a slow trend move higher. There’s lots of variations too but I’ll save those for another time.
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