We will be posting our studies and informative research studies in the coming year. Here is just a little something about our company and service:
Trading Probability is a proprietary trading service that generates trading probabilities on multiple conditions that help traders develop a game plan for what the market could do and act on each day. Trading probabilities covered are when the highs/lows will be put in, Initial Balance breaks and breakouts, Initial Balance range targets, gaps from previous day close and previous day highs/lows, daily closes, previous days highs/lows breaks, and daily price action off the opening print just to name a few. We also have a few proprietary system edges included. Reports are generated and delivered to each member each day at 9:15 EST, 10:35 EST, and after the breaks of the highs or the lows of the day. Our service is based off of the ES (S&p 500 E-Mini Contract) futures market, but equity and option traders will also benefit from this service since this will give an overall bias for the markets. Along with ES levels, we offer SPY levels right along side it. We offer our service for a fraction of what others charge, providing a greater wealth of information, and more worth for your dollar. We feel our service is well worth the 1 handle a month it costs! If we can't improve your trading by 1 handle a month, cancel anytime, no questions asked! The system itself is based off of 30 minute bars. This is not a scalping service! The highest probability trading is done after the first 60 minutes of the day, or the initial balance (IB). Our service is for creating trading visions and seeing how a certain day could unfold, with our bias and information able to help all kinds of traders: scalpers, day traders, swing traders, position traders, and even longer term traders looking for places to enter a market.
Here is an example day based on our proprietary conditions, April 26, 2011, delivered at 7:35 EST for the ESM1 after the Initial Balance:
Here is the first hour chart, with the blue line representing previous day high and red for close:
Here's how we go about interpreting our probabilities and use them to create a vision of how the market will unfold the rest of the day. The first thing we look at is the low of the day %. That is 68.97% that the lows of the day are in, a huge edge. We then look at the Initial Balance high and low to see which favors a break. The highs break 82.76% of the time and the lows break 31.03% of the time. What bias are you going to have going forward? Just think of the context too if you were short from yesterday, and even if you faded the gap and were short from the open today? If the highs break, there is a 58.33% the market will close above 1339.75 so this gives up an inital long bias going forward with stops at new lows. A possible entry on new longs, would be around 1337.25 with stops at new lows, so we now have risk/reward defined. The low of the day is a tick above yesterdays highs and since that has held, it can be assumed price is being accepted higher. If the lows break, that means we trade back within yesterdays range and probably fill the gap at 1331, so our stop will be 1334.25, so depending upon your risk tolerances, enter long based on that. Looking at our upside targets on a break, both areas show great numbers confirming a fade area to go short. 1345 area has a 4.44 profit factor with a 60% win rate and 1342.50 has a 1.31 profit factor. Add to the fact that the market closes up 100% but up +10 handle only 48.28% and 6.9% up +20 handles, so we trade against the probability of a trend day, and trade for a rotational type day. Game plan going forward, long with stops at new lows, and short upside targets if we do break and make it that far. If the lows break, we would look at the probabilities to give a better picture, but we also have good rotational longs around the targets, so we will look for short exits and longs around there.
Well the high break came in the next 30 minutes with some strength:
(red lines are upside targets and purple are IB high/low)
Here's the new report:
Looking here, we can see the jump in the lows of day being in, at 82.35% now, though we close above 1339.75 52.94% of the time, which is relatively unchanged, and the Open System has moved slightly to 6.53 up/down on the day, but not much else has moved. Our upside fade targets remain positive for fading, the % we close up 20+ handles moved up some, but our fade approach is still valid and we will look for reversal confirmation on the 1 or 5 minute chart to enter shorts. Our upside targets have a 70.59% to hit 1342.50 and 41.18% to hit 1345.00 so we will start to look to exit and get short starting at 1342.50. If 1339.75 gets hit before our upside targets, then we will look to enter longs again around 1337.25 especially, with stops at 1334.25. Sometimes the market likes to retest the IB high before continuing higher. Game plan going forward, look for longs around 1339.75-1338.25 with stops at 1334.75 and exit longs/enter shorts around 1342.50-1345 targeting a rotation back within value on the day, with a stop at a reference high.
Here's how the rest of the day played out:
As you can see this set up worked well for fade, reaching target 2 and the average IB high break. High tick was 1346.25. If you missed the fade levels, you had a chance to get back in after confirmation with a better risk/reward setup as you could have entered the market short with a stop at new highs. That is also the benefit of waiting for confirmation, you have a better sense of risk/reward instead of throwing a limit order short out there in the middle of an up move. It also shows you to let price action lead the way. We had poor % to hit 1345.00, but we did. We know the market will break 0% at some point and not hit 100% too, so always let price lead the way. Hopefully you can get a sense of how this service can work to help you generate trade ideas and add confidence to your own trading system or get you away from a low probability set up. This is not a holy grail. Every trading day is its own unique day, influenced by news, participants, and emotions. You can just get a sense of historical bias that can influence the way you read price action and read where market participants are located. We do not offer real-time trades. If you are relying on someone else for your trades, you will not succeed. Develop your own trading plan, log all your trades, and do not stray from your system. We want you to use our service to help with your conviction or generate ideas to see if they are lining up with your own thinking. Create your own way to read our probabilities and trade them. Maybe you will only take 80%+ setups with profit factors greater than 1.5? Or fade gaps greater than 4 handles, with 75% win rates, and profit factors of 2? Basing your trading off of high probability setups, playing high probability odds, in the long run, you will withstand the losing game of trading and come out on top and succeed. You will be able to generate better visions of how the market will unfold. We offer a free week trial for all new users for a risk free look inside TradingProbability.com and see if it is a fit in your own trading system.