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Yes every instrument is different and has it's own "personality", however the zones can be applied to any market. My approach is the same.
Typically I place my stop (for GC) 1 point (or $100) OUTSIDE of the zone for every (one) contract. I do not move my stop. Depending on volatility I will target the next higher/lower zone. If I feel price can go through a zone I will hold the position. Once price breaks and holds, I will move my stop to 1 point outside of that new zone, kinda like stair-stepping. Does this make sense?
So assume u had entered somewhere during the big drop say around 1288 or so then your stop would be 1292 - 1 point the top of the zone above and let's say u had gone long after the bounce to 1284 then your stop would have been 1282.5 which is 1 point below the bottom zone and get out after u can get as much of the trade based on price action/indicators?
A couple of things i want to point out from your question: I don't consider yesterday's early price action a "big drop". Entering at 1288 would have been a late entry. I had an order to short at 1289.4 already placed, and was filled at that. My stop was at 1291 (based on price action-if GC would have broke above that, I knew the trade was invalidated)and target was twice the balance area height. That trade I took, was posted as a separate trade set-up "within" the context of my zone trading.
The zones can provide a location with minimal risk. Most of my trades are entered, waiting to get filled, with a stop 1-point outside the zone. I will target the next zone. If price structure allows, I may hold the trade to target the following zone.
As a day trader, we are limited to time. The zones I create are based off of my tolerance for a loss, meaning, zones can be created wider or zones can be added in between. My point is that I know my risk tolerance and I am looking to 2-3 quality trades a day.
