I track every e-mini trade that I execute on a commercially produced Excel-based spreadsheet for review at a later time.
This particular spreadsheet requires me to enter some fairly detailed information about each trade and on a separate page tallies the information and provides me with a complete page of my trading metrics.
In short, I know what trades are working and what trades are dogs.
The details are very specific and provide me with winning/losing statistics on long/short trades, specific set-ups, average winning totals and a wealth of other trading stats derived from my e-mini trading inputs.
So, what really works? I use a set of bands similar to a Keltner Channel that I have customized to meet my specific e-mini trading needs.
I usually set the inner channel line to 2 standard deviations and the outer channel line to 3 standard deviations; I use a Simple Moving Average that ranges from 200 periods to 300 periods, depending on the day.
I like to trade outliers, or trades that have strayed past the inner line between 2 and 3 standard deviations.
A word of note: If you are in a strong trending market, which is about 30% of the time, there is no price you can positively identify as an outlier and the bands have to be used in a different fashion.
For example, in a market trending upwards, a retracement that moves into the lower band would grab my attention for a potential move back with the trend, the exact opposite would apply for short trades; look for the trend to potentially resume should the price wander into the upper bands.
In a bracketed market the reversion to the mean and the bands really shine and my winning percentage on more than 600 e-mini trades is 88%.
For me, a bracketed market is a real boon, which is contrary to popular e-mini trading thinking.
The numbers don't lie and this set-up is particularly successful in my personal trading style.
If you have read any of my past articles, you know that I am a great adherent to order flow trading/auction theory combined with Market Profile.
When price action moves into Market Profile value areas with momentum there is a potential for very profitable trading action.
By observing strength on the bid and ask side you can easily see the momentum and momentum strength.
This style often presents some unusual set-ups.
But order flow is order flow, and I believe in the system and have 312 trades tallied with a 79% winning rate with this system.
You really have to believe in this system to take the trades because they often defy logic.
That being said, I know the set-up works and can be traded with great success.
Next article we will discuss my set-ups that consistently fail; which is not a pleasant topic for me to disclose.
All the best in your trading...