I am going to start posting statistics for ES. I hope you will find them useful. The open is at 4:30pm EST(6pm on sun) and these stats show the probabilities of a target being hit by the CLOSE tomorrow. So if the targets(YH, YO, YL) are taken out in the after hours or PreMarket session those count as well. If they are not taken out, than they are still good for the RTH session. So with that lets go:
Well I dont really USE them per say. But I do think that they can be useful in certain situations. Like today, YL had an 86% chance of being taken out. But it never did...they are just statististics. Highly probable != certain.
Now if i see that pice action is in an up trend AND YH hasnt been taken out AND stats say that YH is a reasonable target with a reasonable chance of success AND its not too far away, than I might, repeat might, put a target up there near YH.
So a lot of things have to line up for me to ue it in my trading. I thought i would share the stats each day. Use them in your trading as you wish,or don't use them at all. just my little contibution to the community.
The following user says Thank You to Laserdan for this post:
I use some similar concepts, but in a different way.
Your statistics are about volatility and conditional probabilities. The volatility is interesting, I use it by plotting yesterday's low and high, pivot levels and pivot ranges. The conditional probability that you indicate is less interesting. When the market opens - or for Fridays after the news release, which is prior to the open - one of several scenarios can be validated.
For example yesterday evening ES tested the Globex low, stopped 1 tick below and immediately snapped back. This is a perfect long setup which was the confirmed by a gap up.
I trade pretty much how laserdan describes it.... I have statistics, and i look for certain conditions that i look for to see if it agrees... If the risk reward is in my favor(usually 1 point risk per 2 point target), then i take it.
1. when you have a 80% chance of hitting a target, 2. a system(not exactly mechanical, could be anything such as volume or price action) that you use which gives you an edge in terms of trading signals, 3. and if( and only if) the risk:reward is in your favor, then you take it.
Im just pointing out how many stars need to be aligned in order for you to take a trade. You honestly only get 2-3 good setups per DAY if you follow these rules... Most people make 20 trades a day. Thats not right( unless your a scalper, and i haven't met any scalpers that are profitable).