Running stops is one of the most reliable patterns in Emini futures trading – Professionals use it deliberately to flush out Amateurs before the real move begins.
Quick video today about Running Stops and the magic 2 point zone. Use this knowledge to place your profit targets and get out on some exhaustion activity.
In the Emini market you will always find a cluster of Stops sitting 2 points above a previous pivot high and 2 points below a previous pivot low. The Professionals know this and will push the market to “trigger” these stops – and shake out the Amateurs.
The activity around a previous pivot high (or pivot low) usually goes like this:
- The previous high (or low) is hit and the market pulls back from this extreme. This is profit taking and maybe some traders trying to play a double top (bottom).
- Then the market makes another advance at the previous high (or low) and the Stops start to get triggered. It’s almost like a firecracker going off and the market suddenly accelerates. The activity usually stops after another 1.5 to 2 points.
- Lastly, the market usually “completes” with a Pull Back to End of Trend pattern on Better Sine Wave on the 500 tick chart – and the trend move is temporarily over.
I prefer to get out on the extreme activity (running stops), effectively on the left shoulder. So I will place a profit target at the extreme of this 2 point zone. Some traders are willing to sit through a little more volatility and will wait for the “End of Trend” warning signal on Better Sine Wave before taking profits.
Quotes of the day …
Barry, I’m using your indicators and am at +23 points for July.
Markus L.
I have watched almost all vids and bought your tools … so far 4 days straight without a loss … Very nice.
Tony
Just wanted to you let you know I had my biggest single winning trade today. +8 points from 1362 to 1370. This knowledge feeds directly into how to set profit targets and stop losses – knowing where stops cluster tells you where to aim. The daily, 135 and 45 minute time frame setup gives you the context to identify those levels.
Jason S.
