Thursday saw mild declines for the market, but the overnight Odds appeared strong. Below is a look at the Odds Sheet as it stood near the close.
All 8 index securities we track met the min criteria for a possible long trade. Seasonality was especially strong, and Price Action and Internals supported the idea of a long trade with moderate bullish Odds as well. The EdgeFinder was also supportive. So with what appeared to be a clear directional edge I decided to take a long position near the close.
I was filled at 2100.75. With recent volatility tight, I used the Loose Stop. I also set my target using the X Target amount. Unfortunately, despite the Odds favoring the long side, the market went the other way. News overseas put a scare into the futures and they took a tumble. I was stopped out at 6:14am when ES hit 2088.75 for a 12 point loss. Futures continued drop further from there and ES opened this morning with a hefty 17 point gap down.
Trades like this are reminders that we trade probabilities – not certainties. I’ll take a setup like this every time. And I’ll probably make money 2 out of 3 times. Unfortunately, this fell into the 1/3 category. So I’ll shake it off and await the next favorable setup.
Good luck if you trade tonight, and rest easy!
New to the Odds Sheets? Check out this video for a detailed explanation.
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