Today I was asked by a member how the IZSS chart would have captured and dealt the nice little end of day rally on the ES (E-Mini SP 500 futures)
I don’t trade the ES so I was curious and brought up the chart.
First thing I noticed was the markets move down beyond a -2 total deviation. Having personally used Apex Deviation levels for a long time I know this area is a strong area of potential reversal. But as with any market, anything can happen at any time. I would have been biased to look for a long entry however I would wait for IZSS to confirm for me.
I would like to take a tangent here and mention a thought I have been having about I Zone SharpShooter inspired by something Darrell had said about placing stops. Yes the system can and does grab some really great trades and trends. But I have started looking at it also as a system that “Objectively manages my risk”. I have stopped looking at how many ticks or pips that it grabs me because I don’t know where my profit is going to be taken when I am trend trading. I look at it like how many ticks or pips has the system prevented me from losing. As a result, now I get excited when I reach break even and the system grabs what its going to grab. I get excited every time I trail with the MVP arrows and every time I reduce my risk by a few ticks or pips. I get excited when I know that the most I can lose at one point in a trade is $50. Who know’s, the trade could go on to make $1000, don’t know, but I get excited when my risk has been slowly and objectively reduced with every passing bar. That’s how I trade now, let the system grab what it’s going to grab and feel good every time I reduce my risk and lock in a little bit more toward the possibility of grabbing and locking in that $1000 runner.
So with that in mind, I marked up the sequence of this nice little rally on the ES from a risk reduction and locking in profit standpoint. I was biased long but only if I got a valid long signal would i have taken an entry. Look at these charts as I mark up time stamps and mention what our risk would have been and how “objectively reducing risk” would be my goal and whatever we lock in until we are stopped out is how I would have trend traded this entry. Remember for each MVP arrow we trail 3 ticks below. I marked up places that I thought would be interesting from a “time in the trade” standpoint.
First attempt: Order would have been cancelled according to the rules.
Next valid entry and “Objectively reducing my risk”
Clean chart for your review:
Trend trading takes patience. When you make good trades based on the rules and really only worry about what you can control once in the trade which is your risk, you will find that IZSS keeps you honest about your stop placement and keeps you in the game by helping you manage that risk objectively and lock in these nice running trend trades.
Thank you @darrell for creating not only a system that can catch amazing trends, but keeps us traders honest and objective about our risk!