Profitable Futures Day Trading
October 2026
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.
Counter Trend Moves – Snapbacks – Reversals
10/30/2026
Today started off just fine. There was an early Short Alert that hit Target 1 for +8.25 points and got as much as 17.25 points of Traction.
The Trailing Stop tightened once prior to T1 getting hit and then 2 more times as price got almost halfway to Target 2. As you know the Trailing Stop moves are intended to reduce risk and protect gains and it worked exactly as as it should have today.
But price had a huge “snap-back” move after T1 was hit and that tagged the tightened Trailing Stop just a couple points past the Entry. So the Trailing Stop basically protected the gain at T1 but unfortunately there was no new alert afterwards and I’ll explain why.
First, here’s the chart.
Take a close look at that rally after Target 1 got hit. It was a significant “counter trend” move and could have just as easily turned into a full-blown reversal. I used the word “snap-back” too and I guess it applies but the point is that from the 10:30 low to the 10:50 high, that snap-back measured 31.50 points.
As I’ve mentioned, the Trailing Stop is designed to avoid getting knocked-out of a trade through “minor” counter-trend moves but that wasn’t minor at all. It made perfect sense that the stop had tightened to right around the Entry given the Traction before the bounce.
But all that aside, the important thing here is understanding why there was no second Short Alert. I made a note on the chart that explains it, but basically price needs to close at least 3/4 of the way back into the opposite side of the range in order to get a new Alert in the same direction as one that hit the Trailing Stop.
Basically it’s a way to ensure the system “resets” properly.
The reason it’s set up that way isn’t really apparent on today’s chart but you’ll see plenty of cases in the future where it makes perfect sense. It’s something we have programmed into the logic to avoid getting whipsawed.
In other words we don’t want to get knocked-out of a trade and then turn right back around and get in another one in the same direction as the one that just hit the stop.. There are tons of cases where that would be a bad idea. It just so happens that today was a bit unusual in the way the price action manifested and the fact the volatility was extraordinary.
In theory you could choose to get back in a trade even if the system doesn’t give a new Alert, but that requires some discretion and wouldn’t be appropriate in many cases.
The Trailing Stop did exactly what it was designed to do – protect (most of) the gains from Target 1. But price didn’t quite make it far enough towards T2 for the Stop to move to the T1 level and price didn’t quite make it far enough back into the Range to “reset” everything for another Short Alert.
The thing is that price can decide to do anything at any time. For all we knew, that “bounce” could have turned into a full-blown reversal and price could have broken out of the top of the range. We just never know what the market is going to do next, so tightening the Stop is how the system reduces risk and prevents a winner from turning into a loser.
But since everything is a compromise when it comes to “calibrations” sometimes it results in a missed opportunity because price “would have” hit Target 2 and then some. No big deal.
The Oversized Envelope
10/29/2026
It was an unusually choppy and volatile day and the price action was a mess. All three Alerts hit the Stop and even though two of them had tightened a bit, it was still ugly. Some days the price action isn’t conducive to the system and this was one of them. I’m going to try and explain why briefly.
So here’s the chart and I shaded the Trigger Range blue and the “envelope” around the price action white.
Basically price chopped up and down in a wide range early-on and the system created an “envelope” around the highs and lows. You can see the green dashed line at the top of the envelope and the red dashed line at the bottom and those were where the Entries triggered-in.
And there just wasn’t enough additional forward momentum to carry price to Target 1.
Because the ranges we so wide, the Trailing Stops were basically in the middle of the Trigger Range and got hit by the erratic zig-zag price action. Each time price tried to break out of the larger “structure” it got turned back.
Typically hitting the first Target is easy, but occasionally we get a session like this where price is just all over the map and no real trend develops. It was a range-bound day and the each time price tried to break out it didn’t make it too far. There was no real “escape of the envelope”.
So I think the chart basically tells the story. The Trigger Range is the starting visual reference point and the system creates a “structure” around the price with the idea that when it breaks out in one direction or the other it will get at least enough follow-through to get to Target 1, which is usually a “fairly easy to hit target”.
It doesn’t always work out like that though. Days like this come along every so often and it’s just a function of how the price decided to manifest.
The Ideal Outcome For Fed Day
10/28/2026
There was one early morning Alert today that hit both Targets and the system was “done for the day” in the first half-hour of the cash session. That’s ideal considering it’s Fed Day and who knows what the market will do this afternoon.
Yesterday I wrote “There have been Fed Days where the system gave an Alert in the morning that hit both Targets, so it was “done for the day” prior to the announcement” and that’s exactly how it played out today.
I took this screenshot when Target 2 got hit and 7-minutes later price snapped-back to the T1 level where the Trailing Stop had tightened to. And as you know, once both Targets get hit and price eventually tags the tightened Trailing Stop, the system goes offline the rest of the session.
Check out those time stamps.
The morning “impulse move” lower transpired quickly and it turned out to be the perfect situation since we don’t have to worry about what the market does this afternoon during all the Fed nonsense.
Over the years we’ve seen just about any and every possible scenario play out on Fed Day so keep in mind what I said in the prior post for future reference.
But today the early price action provided the ideal outcome for the system.
Tomorrow Is Fed Day
10/27/2026
I’m going to post the usual “avoid trading over the Fed Announcement” message below, but first I wanted to review today’s session real quick.
As you know, the day before the Fed interest rate announcement can be a little weird. Sometimes it’s super dull and other times it’s just a little unusual because of “positioning” ahead of the interest rate announcement.
Today there were 3 alerts.
The first Long came within 1-tick of Target 1 but didn’t make it and hit the stop. It was kind of an early fake-out move because there was a huge red candle shortly thereafter that hit the stop and triggered a Short Alert. I’m not sure if that was due to news or not.
The second Alert was a Short and hit Target 1 and came within 1-point of Target 2. The Trailing Stop had tightened to the Target 1 level (to protect that gain) and that’s where it got knocked-out.
The third Alert was a Long and hit both Targets. There was quite a bit of Traction past T2.
Here’s the chart.
Notice on the first Long I marked where T1 was a little higher than on the second Long. That’s because the fill (Entry Confirmation) on that alert was a little higher just due to the 1-minute closing candle that triggered it in. The T1 and T2 dotted lines that span the chart were for the second Long Alert. I backed the chart up to where the final Trailing stop got hit just above T2.
Interestingly enough, price pulled back to and touched Target 2 again “to the tick” on the very next two 5-minute candles after the final Long trade got closed. It bounced right off that exact level and rallied back up to the highs into the close.
All in all the session turned out just a little better than breakeven due to the first stop-out, but that’s assuming trading 2 Contracts on all three alerts. There was plenty of opportunity to “scale and trail” or capture extra points using any number of strategies and a little fancy footwork. Remember, you are always free to use a different stop than the system at any time based on what you see on the chart.
It’s interesting how that “high of the day” candle in the middle of the chart was such a textbook shooting star. That final Long Alert got +31.50 points of Traction and only took -1.75 points of heat. The Targets were a little smaller than usual today because of the pre-market and opening range ATR’s.
Moving on…
For almost 2 years now I’ve posted here the day before the Fed interest rate announcement day. The morning session is fair game but there’s no telling how “conducive to trading” the price action will be.
We don’t recommend holding a position over the Fed interest rate announcement. We also don’t recommend trying to trade an Alert that fires off immediately following the announcement if there is one. I’d also say to avoid any Alert that might fire off during the press conference.
There have been Fed Days where the system gave an Alert in the morning that hit both Targets, so it was “done for the day” prior to the announcement. But over the years there’s been plenty of Fed Days where the early session is dull and there’s not a lot of price movement. It’s hard to know what to expect tomorrow.
Some Fed days there’s an open trade going into the news and the direction of the “initial price reaction” is basically a crap-shoot. So it’s just not a good idea to risk it because the market can move extremely fast immediately following the news hitting the wire. There’s no real edge and most traders avoid trading over the Fed announcement.
The reason we recommend avoiding holding a trade over the announcement is that there’s not typically time to react. If there happens to be an open Alert at the time, price will typically either hit the Stop or both Targets within a minute or two. Not really ideal and it could go either way.
Generally speaking, the potential erratic price action in the afternoon on Fed Days is best avoided.
Another scenario we’ve seen over the years is that an Alert “fires off” when the market goes haywire immediately following the announcement. And that’s another situation we recommend avoiding. The market reacts differently each time and it doesn’t really matter if the news is exactly “as expected”, the volatility almost always spikes and the market immediately goes into a period of extreme “range expansion”.
Back in the good old days it was more common for the market to make HUGE moves quickly, both up and down. More recently the price action tends to be a bit more subdued after the news hits, but you never know. Over the years I’ve seen some crazy volatility like the price will spike higher 20 points and then drop 30 points within a couple minutes.
It’s always best to be flat going into the Fed Announcement, even if there’s an active alert going into it or if an alert fires off afterwards. But we leave the software running “just for the fun of it”. It’s interesting to see how things play out.
Then we get a couple days to watch the dust settle and it’s Halloween and the month is over.
A Few Interesting Points From Today’s Session
10/26/2026
I’ve talked about this a lot over the past couple years but today is a great example of something.
This looks like a normal price chart right? It’s a 5-minute chart of today’s session from 9:30-4:00 eastern.
But wait a minute. There’s no “price scale” on the right. So we have no idea what the ranges on those candles are. We have no idea how big the moves were without the scale. A few years back I’d see a similar chart and assume maybe around the open those candle ranges were maybe roughly 6-8 points each. That would just be a guess of course.
Here’s the ATR’s (low to high ranges) of the first 10 candles of the cash session starting with the very left candle on that chart.
14.25
15.75
14.50
11.75
11.50
16.00
11.00
10.25
13.75
11.75
Those are fairly large ranges and it means that “normal price fluctuation” in the first 50 minutes after the cash open was averaging 13 points every 5-minutes. Some of you may remember that back in the good old days a 13 point ES move was a lot. Nowadays it’s nothing and that’s just a function of the current nominal price level. With ES in the 7,000’s we have to expect “normal price fluctuation” to be much larger than it was when ES was only 3-4-5,000.
One of the reasons I’m bringing this up again is that today’s Long Alert took 17.25 points of “heat” before turning back around and hitting both Targets.
Take a look at the chart above again and notice the first red candle on the left. That’s where the “negative traction” occurred and really it was just a normal, reasonable backing and filling of the first two candles. If those candles ranges had been 6-8 points it wouldn’t have even seemed like a big deal.
My point is that we need to “maintain proper perspective” because this ain’t our Grandpa’s market anymore. The numbers are a LOT bigger, just like the prices at the grocery store.
The past few years more than a few people I talked to seemed shocked that the ES / MES Momentum System uses an 18 point “max stop” but that’s because they haven’t adjusted their mindset to the “new normal”. I went to Publix earlier to pick up a few things and noticed they are charging $26.99 a pound for cod. I like fish & chips but that gave me sticker shock.
So the 17.25 points of heat this trade took wasn’t a big deal in the overall scheme of things considering price just basically pulled back to the mid-point of the Trigger Range. Just a normal counter-trend retrace that seems like a lot only because all the other numbers were big.
After price pushed through Target 1 and got about half-way to Target 2 there was a minor -16.75 point “counter-trend move” which occurred in the 3 candles from 10:20 to 10:35. No big deal. The Trailing Stop attempts to keep us in a trade through normal price fluctuation and minor counter-trend moves.
Good thing because price went on to hit Target 2 which was +24.75 points above the Entry.
Here’s how the Alert Software looked after Target 2 got hit.
The Traction Indicator shows the -17.25 points of negative price excursion and the +39.00 points of “positive traction”. Those are measured from the Entry Confirmation price just FYI.
Depending on how many of these posts you’ve read you’ve probably heard me say it a dozen times or more, but it’s such an important point I have to say it again. “The tighter the stop the more likely it is to get hit”.
The way we can compensate for these big numbers is to trade MES instead of ES and adjust our position sizes to compensate for the “range expansion” in today’s crazy market.
You know one of the other things I always harp about is “taking current market conditions” into account. In other words today’s session was a lot different than say one of those lazy Summer days back in June where the average ATR’s were 4-6 points.
I’ve written a lot about that too in the past and I’m sure we’ll revisit it again.
Before I forget, that Parabolic Stop level was pretty amazing today eh? It basically protected the level just before the high of the day candle, but I won’t get into that now for the sake of brevity.
I don’t want to make this post too long. Over the weekend as I was “revamping” this website I read back over some of the posts – even some from back in 2025. And it occurred to me that sometimes I tend to get carried away with the length of these posts and personally my attention span isn’t what it used to be either.
I appreciate you taking the time to read these, or at least skim through them and I have lots more to say as we go forward.
That Was Easy
10/22/2026
I changed the website “theme” here this morning so everything looks a little different. But it was easier than I expected to get everything looking fairly similar to how it’s looked all these years. I’m big on “visual appeal” as you can probably tell. It’s going to take some time to get the new site totally perfected but I have a good start. The PHP is updated and everything is totally secure. We’re professionals.
So today was about ideal for the system and the ATR’s were HUGE. Price vacillated around in about a 20-point range for the first half-hour of the cash session and then made a significant “impulse move” lower.
And it wasn’t a fake-out. Both Targets got hit in just three 5-minute candles for a total of +37.00 points.
Here’s a screenshot of the Alert Software when T2 got hit.
Notice there were a couple early “Pending Alerts” that never filled and avoided the early chop. But once that Short triggered-in the market took a winger lower. It’s interesting how the morning lows were right around Target 2. In theory we want the Targets to at levels that capture the most points while still being attainable and that worked out perfectly this morning.
It was a volatile session with big moves. The Trailing Stop tightened several times and “protected” the Target 1 level, which was 9.00 points from the Entry and that’s where it eventually got tagged.
Look at the size of most of these candles.
And here’s something else. About a week ago NinjaTrader pushed me an update and ever since something just didn’t look right on my charts. Then I figured it out today. I right-clicked on the chart and selected Data Series and unchecked the box “outline and wick match body” and voila, my charts look like they did before, with the white wicks and outline around the candles. I just like it that way.
Good day for the system and the new website “facade” is lookin’ good too.
And tomorrow is Friday!
Important Stuff – Please Read
10/21/2026
Before I get into talking about the Alerts I wanted to mention some important things regarding this website.
As you probably heard, there’s an important PHP update that fixes critical flaws in all prior versions of PHP. WordPress runs on PHP and this website runs on WordPress. I originally created this site about 11 years ago and the “theme” we’ve been using all that time is not compatible with the new version of PHP. It’s too bad because I’ve always liked this site “visually”.
So long story short, I’m “recreating” the entire Power Emini website in a more modern Theme. I’m in the process of changing everything here over to the new theme, so if you see some weird things and the pages look different just bear with me until I get everything tweaked.
A brand-new PowerEmini.com website is in the works.
Moving on to the Alerts the past two days…
The same thing happened both yesterday and today. The first Alert was a Short and it hit the Stop and the second Alert was a Long and it hit both Targets. What’s with these fake-out down moves at the start of the session? Very strange. Both sessions had 5-minute candles with big 5-minute ATR’s and lately it’s not unusual to see price move 10-15+ points in a 5-minute candle.
I wanted to point something out on today’s chart. Take a look at those pre-market lows.
So we can see that the early Short Alert was quite a distance from the bottom of the Range and the reason is those earlier lows where I drew the arrows. Conceptually the idea was that they were support levels that needed to get violated in order for a significant trend move lower. However just like yesterday, the initial move lower was a fake-out.
And just like yesterday, the market rallied big-time and the system then gave a Long Alert that hit both Targets and then some. Yesterday Target 2 was 15.00 points from the Entry and that was nothing. That Alert got 55.50 points of Traction. Today Target 2 was 20.75 points and there was 30.50 points of Traction.
Here’s the really strange thing. Last week we had 2 of the exact same situations where the first Alert hit the Stop and the second one hit both Targets. Typically what happens on these “reversal days” is that the first Alert hits Target 1 and then the reversal hits one or both of the Targets. What we’ve just seen is 4 early fake-out moves in the span of a week and that’s highly unusual.
As I explained in a prior post, in theory an Alert that hits both Targets usually makes up for one that hits the full stop, but it depends on where the entry was and all the different variables. With the ATR’s somewhat elevated the numbers are a bit bigger than usual and you can see the initial stop on the Short this morning was just around halfway into the Range.
Here’s how the Alert Software looked after T2 got hit.
No big cause for concern though. They can’t possibly continue to do these fake-outs every morning and these are highly unusual. As soon as we think it’s a good idea to skip the first Alert of the day, that’s when the market will pick a direction at the open and never look back. There are some Contract “scaling” possibilities that can work when we see this type of price action but I don’t want to get too far into the weeds on that.
I have a lot more I could say but I need to get back to my project of rebuilding this website. There’s only so many hours in a day and I’ve always liked the look of this site but it’s time to update through no fault of my own. I’ve always thought “if it ain’t broke don’t fix it” and the site has been running fine and looking good for a decade.
Fairly Decent Considering…
10/19/2026
Today there were two Alerts and both “just hit Target 1”. But that turned out fairly decent considering the second Alert got enough Traction so the Trailing Stop was protecting Target 1.
The first Alert hit T1 and the stop tightened enough to put the trade at breakeven (actually a couple ticks to the good). On the Long Alert Target 1 was +6.75 points and even though price never made it all the way to Target 2, the T1 level was protected.
Here’s the chart.
It’s actually pretty interesting to see how aggressively the Trailing Stop tightened on the Short Alert to get the trade to breakeven once T1 was hit. The huge green candle was likely due to some news hitting the wire so the way the system tightens the stop prevents a winner turning into a loser once T1 is hit. Better safe than sorry.
One thing to notice was that the distance to T1 on the Short Alert was 5.25 points and the distance to T1 on the Long Alert was 6.75 points.
That means the system was “detecting” there was more potential upside than downside in today’s session. That’s one of those little nuances I mention occasionally. Sometimes the distances to the Targets are equal or really close and other times they vary based on the larger market structure.
Another interesting thing about today’s session was that big red candle after the Long alert had filled. We can see it never broke below the bottom of the Range and that’s where the initial stop was, so it never got hit. So that Alert took a lot of heat but worked out just fine afterwards.
That’s why the initial stop starts off at the location where the trade is “proven wrong” and that’s typically a tick past the opposite side of the Trigger Range. Those were some pretty erratic moves early-on and the ATR’s on the two long-range candles was huge. As a rule of thumb I consider a 15 point or more 5-minute candle as having a huge ATR, but it’s not all that uncommon.
Once last thing. Late in the session there were a couple more “potential” Short Alerts that fired off and never filled. The last one was just 2-minutes before the 2:30 “cut-off” and that might have been one to just skip if you were still in front of the screen. The idea is that if there’s no active filled Alert at 2:30 then the system goes offline for the rest of the session.
It’s programmed that way for a couple reasons. First, the trades can take a while to play out since Target 2 is typically a significant distance away from the Entry and late afternoon trades aren’t as likely to have enough time to fully play out.
The second reason is that we don’t want to get filled on an Alert a few minutes before the cash session close. In that case there definitely wouldn’t be enough time for an Alert to play out. Many many years ago we didn’t have that rule in place and one day we had an Alert fill just a couple minutes before the close and that didn’t make sense – so we introduced that “cut-off time” rule.
Last week had a lot of important economic news and Friday was opex, but other than earnings season gearing up I expect the trading environment to return to more normal conditions other than the occasional “breaking news” out of the blue.
It Was A Weird Week And Today Was OPEX
10/16/2026
It seems like it was an unusual week. We had CPI and PPI and Opex and the week was extremely volatile and ended on a big down day.
Both yesterday and the day before the first Alert of the day hit the Stop and the second Alert each day hit both Targets. The system is calibrated so when that happens it’s supposed to “about even out” but it depends on where the Entry occurs in relation to the Alert price. In other words if the “fill” is too far away from the Alert / Barrier then the numbers don’t come as close to being even.
Same with Target 1. When T1 gets hit the Trailing Stop tightens to put that trade right around breakeven. But it depends on where the Entry was and the distance to the Targets and how wide the average ATR’s are. For all intents and purposes we consider a few points either way “breakeven” because the system is calibrated assuming we’re shooting for both Targets.
I bring this up because these past three days in a row saw these situations where breakeven was achieved based on what I said above, but the net result of that was -13.25 points. That’s not a big deal and pretty close to breakeven in the bigger scheme of things considering all the volatility and the fact that’s about an ATR(1) on the 5-minute timeframe.
But today was unfortunate because Target 1 got hit and the market bounced just enough to hit the Trailing Stop which had tightened twice. So the MES Momentum System missed out on the big drop. But as I’ve mentioned here numerous times, “the tighter the stop the more likely it is to get hit”. And every now and then the Trailing Stop gets nicked after it’s tightened and shortly thereafter the market proceeds to make a big move in the direction we wanted.
It’s really a compromise. If the Trailing Stop didn’t tighten then there would be times where we were “right around breakeven” and the “counter-trend” move would turn into a full-blown reversal. So the idea is “better safe than sorry” and the Trailing Stop is designed to tighten and “reduce risk”. And sometimes like today there’s not enough “wiggle room” and it gets tagged.
NQ caught the entire move today and didn’t get knocked-out and the Trailing stop was never hit into the close. The short Alert had a whopping 623.25 points of Traction. I mentioned the other day that I want to keep it simple here and stay focused on MES, but that’s one for the record books.
The volatility definitely picked up this week and like I said in the last post, that usually persists when we get these long-range days. Opex days are always a little weird but it’s nice to see the “action” pick up. The past three days have definitely seen “range expansion” and that generally makes for a good trading environment. But keep in mind both the risk and reward expand when the market gets volatile.
We’ll have to see what next week brings.
CPI Day Was Wild
10/14/2026
I mentioned yesterday that maybe the market was waiting on the CPI number to “do something” and today was sure something. When the CPI number came out a wee bit “hotter than expected” the market (ES) plunged almost 50 points in the following 5-minute candle.
In the next hour going into the open, price bounced around in about a 15-point range and shortly after the cash open it attempted to bounce even more. On the chart we can see a sort of bottoming pattern and rally attempt where the Long is marked, but it was short-lived and all downhill from there. Honestly in most cases like this we’d expect a little bit of a rally and follow-through on the attempt. But not this time.
This was an example of a “stop and reverse” with a few minutes in between and you might recall the post about that. It’s not all that uncommon for the first move to be a fake-out early-on even if price makes it to T1. So this is why we wouldn’t want to eliminate Alerts that occur in the opposite direction shortly after the Trailing Stop is hit.
Here’s the chart of the whole session including the pre-market CPI number release.
Notice that the price scale increments are a whopping 10-points. I mention this sometimes because price patterns can look similar but the size of the candles and overall moves can vary a lot. Most of the charts I’ve posted here the past couple years have 5-point price increments on the 5-minute chart. Charts with 2-point increments tend to indicate dull sessions and one like today with 10-point increments means it was a “long range” day.
Needless to say the Short Alert hit both Targets and it was kind of unusual that they weren’t further out from the Entry. But the system was using the early ATR’s and ignoring the CPI candle so they were a reasonable distance based on that. It was impossible to know at the time that the market would have such a big sell-off the rest of the session.
The “Traction” on the Short reached 68.00 points at the session low and you can see how far the Trailing Stop tightened before it got hit about a half-hour prior to the close.
So a long-range day like today tends to kick off more “action” in the following days. I expect the market to be more volatile from here but the correct term is really “range expansion”.
The market goes through phases where it’s dull and the action is slow and then you get a day like today that changes the character – hopefully. Tomorrow is PPI day so we’re likely to see decent price movement again.
A Couple Choppy Days To Start The Week
10/13/2026
Yesterday was Columbus Day and I didn’t expect much based on the price action and small ATR’s. There was one early Short Alert and the strange thing was that MES hit Target 1 to the tick but ES missed it by a full point two different times. It’s highly unusual for ES and MES to differ by a point, but the volume was really low, probably due to the fact the bond market was closed for the Holiday. So that Alert hit the stop for all intents and purposes because the system uses ES data.
And today wasn’t that great either. There were 3 Alerts and only the middle one hit Target 1 and the other two hit the Stop. Both days were narrow-range days which is not optimal for the system and price basically zig-zagged all over the place in fairly tight ranges.
Both days the chart only had 2-point increments on the price scale which is indicative of a narrow range session. Basically the daily candles were small and the system just didn’t have much to work with as far as trends. The system thrives in active, fast markets with lots of directional price movement and the market doesn’t serve up optimal sessions every day. It’s just sort of the nature of things.
A daily chart of SPY provides the best view of what the daily cash session candle looked like for perspective. I find it easier than changing my chart to RTH and I’m not sure if that includes after the 4:00 close or not.
So a couple rough days isn’t a big deal in the larger scheme of things. Typically price hitting Target 1 is like shooting fish in a barrel but there are periods where the market just doesn’t cooperate and the price action is not conducive to the system. I’ve noticed that NQ seems to be doing well and the last 6 Alerts in a row hit T1, but I really don’t want to go off track here and start confusing things by talking about other symbols. The focus here is on trading MES with the Momentum System.
A long time ago I had a user tell me he trades NQ when the VIX is under 20 and ES when VIX is over 20 and I thought that was interesting, but I don’t want to get bogged down analyzing anything like that. Over the years we’ve always asserted that MES is the best symbol for the Momentum System and I think NQ is probably better for scalping since it tends to trade more erratically.
I had another user tell me he trades both MES and MNQ to “diversify” a bit but that also makes things a little more complex than they need to be. I just thought I’d mention those to put them out there as ideas, but hopefully ES will pick up from here and start to provide some real “action”. There’s nothing worse than low volume, narrow-range choppy days and it’s kind of odd this time of year.
Maybe the market has been on hold the last couple days waiting on the all-important CPI number that comes out in the morning. If so tomorrow could see some good action.
“In trading, everything works sometimes and nothing works always” ~ Ed Seykota
The Week Ended On A High Note
10/9/2026
The final Alert of the week hit both Targets so I suppose you could say it ended on a high note for the most part. But the morning Alert came within 1-tick of Target 1 but didn’t quite make it and that was unfortunate because it was completely viable. And I wanted to show why.
So on this 5-minute chart of the session notice the white arrows I drew at the pre-market lows. Those could be considered near-term support levels and when they got violated the system took a Short.
In a nutshell the system gave a Short Alert that triggered when price broke the range low and just below those prior lows, which seems perfectly reasonable. It just so happens it occurred on a quick impulse move that didn’t quite make it all the way to T1 before it snapped-back. The next candle probed the lows again but didn’t quite make it either and that turned out to be the lows of the cash session.
It’s not very common to miss a target by one lousy tick but we’ve seen it before.
Interestingly enough on the subsequent Long Alert, after price hit Target 1 there was a counter-trend move that came within 2-ticks of the tightened Trailing Stop (but didn’t hit it) and price worked its way back up and eventually hit Target 2.
Target 2 got hit “to the tick” the first time. Then there was another counter-trend move that came within 1-tick of where the Trailing stop was sitting “protecting Target 1”.
So it was kind of a strange session. All these levels where 1-2 ticks mattered or made a difference is fairly unusual. The thing about a Target getting hit “to the tick” is that is that you might not always get a fill. Fortunately the system stayed online and about an hour later Target 2 got hit decisively so it really didn’t matter.
We’ve had a couple sessions this year where MES hit Target 1 but ES didn’t. And it’s possible that ES can hit the stop to the tick and MES doesn’t. But the system uses ES data for a couple reasons I’ve mentioned previously and honestly it rarely makes a difference. There are times when ES and MES differ by a tick but the odds of that happening right at a Stop or target level are extremely rare.
But it’s just something to keep in mind. Today we witnessed an odd session where a tick or two here and there did matter.
Here’s the Alert Software so you can see the time stamps and levels.
The numbers were kind of small today and you can see on the chart that the price scale was in increments of 2 points rather than the usual 5 points. A lot of the price action today was fairly slow and dull with some erratic moves interspersed between the small ATR’s.
So far in October there have been 12 Alerts and 9 of them hit Target 1. That’s a 75% hit rate which means all in all things are going well. One-third of the Alerts went on to hit Target 2 and that’s right in the acceptable range too.
So far so good. Have a great weekend!
Dealing With “Price Spike” Anomalies
10/8/2026
So today we witnessed about the 5th or 6th “anomaly” so far this year. And it was the result of the usual suspect, a “Trump Tweet” or offhand comment that causes an Alert to hit either hit the Stop or the Targets. Obviously there’s no way to anticipate these sudden price spikes caused by a “news event” and I call them anomalies because they usually result in a massive price move in a matter of seconds or even a minute or two.
When these happen it’s a crapshoot if there’s an open trade. Either price hits both Targets or the Stop quickly – which is fine.
The issue is when these “events” cause a new Alert to fire off and trigger-in quickly. Attempting to trade them can result in enormous slippage and the 5-6 times it’s happened this year it would have been impossible to get filled and match the numbers in the software.
And there’s actually several nuances to how things can play out when these anomalies occur. For instance in August there was a Short Alert that fired off and then triggered-in 1-second later. And by the time anyone would have physically been able to react, price was 10-points higher than the system got the fill. And in that particular case the price never hit the Targets or stop into the close so it was definitely a strange situation.
But today was a little different. The alert I mentioned above came out of the blue on a Trump “post” and there was no open Alert. Today was a “stop and reverse” where there was an open Short trade and the “price spike” caused the open Alert to hit the Stop and in the “very same second” (in the time stamps) the software fired a Long Alert.
Some of you probably remember some of the others too. We’ve seen a couple alerts that fired-off and filled and then hit both Targets in the same 1-minute candle or the very next one.
So the issue isn’t so much that a “news item” out of the blue can create a binary event with an open trade. The issue is when a sudden “price anomaly” triggers a new Alert.
And that’s got me thinking of ways to perhaps “suppress” those alerts from happening but it’s not that simple. First thought might be to just to suppress “stop and reverse” situations but I could dig up tons of alerts where that worked just fine. We’ve seen lots of times where maybe price hits T1 and the Trailing Stop and shortly thereafter there’s an impulse move in the opposite direction that turns into a big trend move that hits both targets.
It’s going to require some heavy consideration and testing to find the right set of logic that would suppress these type of Alerts without eliminating the ones that work out fine. My first inclination would be to say if there’s a sudden move of over say 15-20 points in 10-seconds or perhaps “x times the average ATR’s” that would result in a new alert firing off, we could suppress that.
That might actually be a good rule of thumb just in general for alerts to “just pass on” but ideally we’d program some type of logic in the system to prevent them from firing off in the first place. I’ve done quite a few posts about how “reaction times matter” and it’s not unreasonable to skip a trade if it seems obvious there’s a sudden price anomaly.
Over the years we’ve tinkered with different ways to suppress or eliminate Alerts that “might not work” but it always ends up eliminating trades that go on to hit both Targets. So we’ve always erred on the side of “running it wide open” and letting the user decide whether to pass on a trade here and there. Basically we don’t want to screw anything up.
It’s the same reason we keep the system running over the Fed Announcements even though we suggest avoiding trading those afternoons.
And keep in ind these “events” are pretty rare. 5-6 so far this year isn’t a lot and about half of them ended up winners assuming anyone was fast enough to match the system numbers. But my suggestion is to consider stepping aside and using a little discretion in a situation like today. It’s unfortunate the “comment” caused the Stop to get hit, but entering a new trade in the opposite direction the very same second just doesn’t seem reasonable.
Now we just need to find the right logic so the software realizes that. Maybe the rule should be 1-minute between the Trailing Stop getting hit and a new Alert but we’ll have to test that.
Prior to the 25-point price spike in 1-minute things were going just fine. The first Alert of the day hit Target 1 which made it 12 in a row, then the streak ended with a term that came to mind from the golf world – a mulligan.
The open Short at the time was completely viable and made sense based on the price action. The system had the right idea and if it weren’t for the sudden “news event” who knows? Price eventually worked its way much lower way past Target 2 and if it weren’t for the “3 filled alerts per session max” a fourth one would have worked.
…it happens.
A Little Insight Into Today’s Alert
10/7/2026
I decided to post a 1-minute chart of how today’s Alert played out instead of the usual 5-minute chart.
Ideally when trading the Momentum System you’d have both a 1-minute and 5-minute chart up, but once an alert triggers-in (on the 1-min) you really want to switch to and follow along on the 5-minute chart. The 1-minute chart is too “hectic” and can be nerve wracking since in theory the system is aligned more with price movement on the 5-minute timeframe.
It really just uses the 1-minute to “confirm” (or avoid) Entries. We know a LOT can happen in a minute.
But I wanted to zoom in on today’s Short Alert to point out a few things and the 1-minute chart provides the best look.
First of all, prior to what you see on this chart, basically since midnight last night the primary ES / MES trend was down. That continued into the pre-market and open. About an hour prior to the cash open, price put in a pivot low and rebounded a bit, then proceeded to thrash around in about a 10-point range.
At 9:36 (eastern) price broke the pre-market pivot low and the range low and at 9:37:44 the system fired a Short Alert that triggered in at the close of that 1-minute candle. Remember, when the system issues an Alert, the VERY NEXT candle that closes at least 1-tick or more PAST the Alert Price triggers-in the trade.
Here’s what it looked like on the chart.
We can see that Target 1 got hit on the next 1-minute candle and then the price proceeded to “thrash around” for about an hour. On the chart that subsequent “hour of trading” was just a lot of “noise” and that’s what I mean by “nerve wracking” to sit there and watch it waiting to see if price can make it to Target 2.
Price didn’t reach Target 2 for an hour and ten minutes and that’s not something you want to follow on the 1-minute chart. You don’t want to sweat the small stuff because the system is actually tuned to a larger timeframe.
Notice how “accurate” the Target 2 level was today. It turned out to be right around the low of the day and maybe that’s just a coincidence or maybe it was magic. Also notice where the Trailing Stop got hit which was right at the “Target 1 protected” level.
Keep in mind that a lot of what happens in the Alert Software transpires on a much faster timeframe than the 1-minute chart. For instance the “Traction Indicator” updates every 30-seconds and the Targets and Trailing Stop moves are programmed to update “on touch”. The Progress Meters basically update in real-time.
A couple months ago there was an Alert that triggered-in 1-second after the alert fired, but that was an anomaly and we may never see that again.
But for the sake of sanity it’s best to follow the price action on the 5-minute chart, especially after Target 1 gets hit.
Here’s the Alert Software so we can see the Time Stamps of how everything transpired.
Yesterday I talked about “Traction” and you can see this alert only took -1.00 points of “heat” and it only took 25-seconds to hit Target 1 once the Alert filled. I guess that could be considered an “impulse move” in the direction of the primary trend.
The numbers were basically in the “normal” range today as far as the distance to the Targets and the ATR’s were relatively tame.
What happened after this trade got closed is of no consequence.
The trade worked out, both Targets got hit and the system was “done for the day” when the tightened Trailing Stop got hit with a +18.50 point gain. All’s well that ends well as they say.
Let’s Talk About Traction
10/6/2026
I don’t want to jinx it, but the last 10 Alerts in a row all hit Target 1. Four of them also hit Target 2.
So I wanted to do something different today and look at the “Traction” on those Alerts, which is completely different than the point gains based on the Targets. As you know the software displays the positive and negative traction on each filled Alert measured from the Entry price on the trade.
The term “Traction” simply means the maximum positive and negative price moves in points from the Entry before the trade is closed. I’ve seen others use “Maximum Adverse Excursion (MAE) and Maximum Favorable Excursion (MFE)” but it’s all the same thing. Traction is simple and there’s way too many acronyms in this business anyway.
Here’s a graph of the last 10 filled ES / MES Alerts. The 0.00 line is the Entry on the trade and the red shows the negative traction and the green is the positive traction.
Basically the Traction gives us an idea of how good the entries are, irrespective of the Stops and Targets. In other words if we were trading a system that just provided an Entry (without giving stops or targets) we’d want to see more favorable price excursion than negative. Seems pretty logical right?
But it’s interesting to look at it this way because it provides a different perspective. It shows how much “heat” each trade took before it hit the Target(s), but it’s also possible the positive Traction happened first and the negative shows the tightened stop.
But I don’t want to get too far into the weeds on that because the next item is the point I wanted to make.
Guess which one of the Alerts actually netted the most points?
It was the one on 10/1 with the most negative Traction. That Alert hit both Targets for a combined +37.00 points, but took -14.75 points of “heat” prior to that.
As I mentioned, all 10 Alerts hit Target 1 but the 4 that went on to hit Target 2 were the ones on 9/28, 9/30, 10/1, and 10/5. The Alert today came within 1-point of Target 2 but didn’t quite make it, however the Trailing Stop was “protecting” Target 1 so it worked out ok.
Honestly the Traction doesn’t really tell us how well the trades turned out because there’s no context as far as the stop and Targets or whether the positive or negative traction happened first on some of them. Plus it would be impossible to capture the “max point move” on a trade anyway. It’s more of an indication of how accurate the Entries are than anything and really just interesting to see in graphical format.
Also as you know the max negative Traction can never be more than -18 points because that’s the max stop. And there’s no telling where the Targets were on that graph because they vary from session to session. Target 1 ranged from 4.75 points to 9.00 points on these Alerts with an average of 7.
More than anything I wanted to show that the Alert that took the most “heat” of all turned out to be the biggest winner of the bunch and that’s pretty interesting.
The other interesting thing is that the total number of points for these 10 Alerts at Target 1 was 69.75 points. So trading 2 Contracts “just shooting for Target 1” scored 139.50 points.
But there’s more involved with that strategy and one of these days I’ll get into all the details of that.
This Is What A Trend Day Looks Like
10/5/2026
I didn’t post Friday but there were 3 Alerts that all hit Target 1. The first two ended up as breakevens (assuming the standard 2 Contract strategy) and the third Alert scored T1 x 2 = 13.50 points. Interestingly enough the “just shooting for Target 1” strategy would have netted +41.50 points, but that’s a different conversation for another time.
I want to talk about today’s big trend move higher. I’ve talked about the difference between impulse moves and trend moves and today was a perfect example of the latter.
The first half-hour of the cash session saw a lot of congestion and then price chose to break out of that to the upside. The system gave a Long Alert just above all that “noise” and went on to make a huge trend move higher.
But there were a few spots where we might have thought “the move is over” based on the candles and price action at the time. I marked those with “question marks” on the chart.
The move just prior to the first question mark where T1 got hit could be considered an “impulse move”. That big red candle down that retested the Long Entry level made had me thinking “it’s over” at the time but that’s why the market is so tricky. We got a big impulse move higher with five green candles in a row then a red Doji and a long-range red candle down, which looked like a textbook candlestick reversal.
But lo and behold it was just a retest and the next move ran back to the prior intraday high where price sort of “stalled-out” again. That’s where I drew the second question mark. That was another reversal looking pattern there that retested Target 1 from above. At that point price had run up into the resistance at the prior high and got turned back (temporarily).
The red candle after the second question mark could have indicated the move was over too, but price battled its way higher and got really close to Target 2. Once again it started struggling a bit where I have the third question mark but at that point the Trailing Stop had tightened to “protect T1” so even if it didn’t make it to T2, Target 1 was “in the bag”.
In real-time, each question mark was a point in time where one might have “thought” the move higher was over based on the price action. I could have put a fourth question mark after Target 2 got hit too as price also retested that level.
But there’s no question that this session turned out to be a significant trend day higher. Aside from those questionable points where we might have though the move was over, price basically trended higher from the open until about 30-minutes before the cash close. By the way, the sell-down in the last half-hour was typical of a trend day because day traders close positions and take profits on days like this into the close. On big trend days down we usually see buying near the end of the session for the same reason.
Notice this Alert got +50.00 points of “Traction” at the high and took very little heat, a mere -2.75 points near the fill.
Trading 2 Contracts shooting for the two Targets provided a very respectable gain. Here’s a screenshot of the Alert Software with the Time Stamps. Impulse moves tend to hit the Targets quickly while trend moves typically take longer to work their way in the direction of the move.
You can see I scrolled the System Notes down so we could see the start of the session and where the Targets got hit. Everything in the notes above what we see was just Trailing Stop “ratchets” where it tightened a bunch of times before it finally got hit (the yellow line marked on the chart above).
The difference between a trend move and impulse move is fairly obvious and there are times when we could debate which to call it, but the post below provides a decent example of an impulse move.
Honestly, either one is just fine for the system, though some impulse moves only get price to Target 1. Trend moves like today aren’t as frequent but that’s just a function of market behavior.
The system trades “directional moves” in the direction price is currently moving in real-time. It’s “trading with the current trend” because we know price moves from point A to point B and as long as Target 1 is between those points, it’s all good.
October Is Off To A Good Start
10/1/2026
Today was the first trading day of October and the 5-minute ATR’s were large this morning. So the distances to the Targets were fairly significant compared to some recent sessions, but “it’s all relative”.
There was one Short Alert today that hit Target 1 for +9.00 points and Target 2 for +28.00 points. This Alert took -14.75 points of “heat” which is short for “negative price excursion”. We actually call it “Traction” and both the Alert Software and the NinjaTrader indicator display the positive and negative Traction measured from the Entry on filled Alerts.
So -14.75 points against the trade before it worked sounds like a lot. But as you see on the chart below it was just basically “normal price fluctuation” based on the average 5-minute ATR’s and ranges.
Imagine there was no price scale on that chart and you didn’t know the timeframe of the candles. The two candles following where the Entry was taken really don’t look like a big deal. Just kind of a normal bounce and then a resumption of the downtrend. The candle that hit Target 1 and tagged T2 to the tick had a range of 29.00 points.
I included the 5-minute ATR’s on that chart to put things in perspective. I even drew a horizontal line at 18 points which is the “max stop” for the ES / MES Momentum System. Honestly we’ve seen sessions in the past where 18 points is too small for the volatility compared to the ATR’s but “you have to draw the line somewhere”. We did extensive testing to determine the optimal max stop.
Keep in mind that the majority of Alerts that go on to hit the Targets don’t typically take much heat. But sometimes like today they do and it would have been a shame to get stopped out because the stop was too tight and miss out on this trade. Based on the size of the 5-minute candles this morning the negative Traction wasn’t really a big deal. It just seems like a lot because all the numbers were big.
Here’s what the Alert Software looked like when Target 2 got hit.
In “tame market conditions” Target 1 is usually in the 3-6 point range and when the volatility is elevated (wide ATR’s) it’s 7-10+ points. The distance to the Targets is a function of the 5-minute ATR’s and that’s why the numbers can vary so much from session to session.
You can’t use a 6-tick stop when price is moving 10-points every 5-minutes (unless you want to get stopped-out over and over). It should make perfect sense that the distances to the Targets and Stop are relative to the current price action and that’s part of the magic of the system.
The tolerances are relative to the timeframe and volatility. That’s how the system adapts to various market conditions and overall market environments.
October is Seasonally a Good Month for Futures Trading
The market action typically picks up in the Fall months. Seasonally speaking October is usually a good trading month with lots of volatility and active intraday price action.
Recently it’s been kind of a strange news-driven environment and with ES currently over 7,000 we should expect the “price movement” numbers to be large. It’s all relative because 10-20 point moves at 7,000 isn’t substantial compared to when ES was trading in the 3,000’s or 4,000’s which wasn’t all that long ago. The intraday ranges and ATR’s are expected to be considerably bigger given the “nominal price levels” of the indexes.
In the current market environment, 10+ point moves in just a few minutes are more the norm. It’s important to keep that in mind to maintain perspective. When typical intraday price movement is WAY larger than it used to be we’re in a different sort of environment. Super tight stops are more likely to get hit. Normal price fluctuation is probably more than double what it used to be back in the day.
Fortunately the Momentum System adapts to this because it uses the intraday ATR’s to calculate everything. That’s why the system and strategy are just as viable as they’ve always been over all these years.
As we get into October 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
September 2026 Commentary – Notes – Education – Examples
PowerEmini Day Trading Futures – Automated Alert Signals