ES Trading Probabilities

(Originally called "Bruce's Probabilities")

Bruce this is dynamite this is what I do as well but never really knew it, I would like to put it here so it wouldn't get lost;

BruceM said...


A few things I will always keep in mind based on probabilities alone:

1)The markets ability to trade back to the weekly and daily pivot...
2)The markets ability to trade towards the previous days Low or high if we open outside that range
3)The markets attempt to take out the previous days low or high if we open in the range
4) the markets ability to run the overnight low and/or high
5)The markets ability to break last weeks high or low if we open in that range on the first day of the week..


I would add that the markets attempt to move in a monthly bar as a daily bar. That is a month that makes new lows tends to do so most of the month and reverse for highs, and a chop month tends to stay choppy.

Thanks Joe....I was surprised nobody real "dialed in " to that post....I thought it was one of my better ones............these things happen everyday so it makes sense to keep an eye on them...

I was just thinking about stuff the other day and I realized how important targets are to me.....in fact I actually have a target in mind before I put the trade on usually......I like to see the things "they " watch....if we get a pattern or divergence that sets up for the target then even better...

The other great thing we can use is the opening range if we are trading for targets....I'm appreciating it more and more as I don't like missing the move while waiting for fade points at the plus 4 or overnight as an example....We can use the OR to take break out trades for targets like the overnight highs or lows or the pivot or the plus/minus numbers...

I like it as a bias....I'd gladly lose 1.5 to 2 points ( the usual size of the OR)to try and target a plus or minus number..or a pivot or previosu days high or low....On Friday I actually took a small long trade to try and get the overnight high while still having my core short on...but the point being we can set up a matrix and use the OR breaks as the entry signal....then use one of the core probabilities or a plus/minus 4 number as an initial target....you can see the possibilities....and it is logical...

I guess that is why I was surprised nobody commented on it but glad you did....like yourself, many of us do things automatically...my constant babble helps me get clarity also.

Thanks for the input...One last thing

I think we should also add the markets tendancy to break a 30 or 60 minute high or low.....great odds there too

These are true gems and you guys are really terrific for putting it all out there for us to learn, re-learn and profit from your knowledge. Thanks so much. I love this forum!

On a 1 min chart if the RHT opens at the upper or lower envelop of the 20/2 period Boll. Bands and continues in that direction i.e remains in its oversold or overbrought stage, a good chance is that it will trade back to the RHT open.
ChaterJoe: what is the approach during the first few days of the month as we have no proper "Monthly bar", especially on the very first day???

Today 22/06/2009 the S&P RTH opened outside the previous days (19/06/2009) range and took out the overnight low

No Lets see if the market trades back to Pr. Low of 911

perhaps Ak1...I actually sold the OR low to target the overnight low, then last weeks low.....final target for me was the minus 8 as I only had three contracts on (I'm an amateur with the OR break out so far so going in small).......no doubt this would have been a tough "window " fade day but If we look at how we open that gives us a clue and then if we think about where our key probabilities are it can help to avoid the "window"......obviously not perfect but for this thread today we traded to:


the 30 and 60 minute low
S2 on the daily
last weeks RTH low
overnight low
the minus 4 and minus 8
The S1 off the weekly


To put it in perspective, if we are expecting the upper targets to hit like Fridays low or the pivot or gap fill , etc....then we need to see an upward break of the OR...that didn't happen...so far....when we can't even get back to the open print then that is telling us something too..... the $ ticks haven't gotten above plus 500 yet today....so trend day is in force............


Me and Dr. Brett are sounding the same today....but he somehow fiqured out how to use Market Delta....

Thanks Bruce

I guess the real point of that long winded response is to ask " How close are we to the next key probability"....

we don't often close below an S3 number so longs down into this 92- 93 ( S3)are safer to me....

Bruce, S3 that you mention is from Classical P.P Calculation. Right!! Same on the upside if R3 was taken out??? Also for the "OR" do you mean the high and low of the 9:30 est candle/bar on a 1 min chart????

read this thread here to learn about the "Window".....plus and minus 4 and 8 numbers are part of the window

http://www.mypivots.com/Board/Topic/1337/1/pitbull-three-strategy