Hey trader,
The tape had all the energy of a morgue this morning.
The Russell was going absolutely nowhere, chopping in the same tight range it sat in all night.
It’s so easy to get sucked in out of sheer boredom.
Yet, that’s usually when you miss some of the best trades.
I went short Russell micro futures this morning, snapping up $112 with my risk capped at $100.
This wasn’t a trade I had to force.
It actually came from the combination of a technical setup AND the ideal macroeconomic environment.
When you get BOTH of those working in your favor, even soft markets can become profitable.
Today, I want to take you behind the curtain of the 10% Club and lay out the entire trade for you.
We’ll look at the macro factors building against equities and the short setup that offered a high-quality trade.
That way, you can see how to use both to your advantage.
The Bond Market Turned Against Small Caps First
Yesterday, the Russell had a reason to rally.
The U.S. Treasury said it would be buying up Treasuries, and that news drove yields down.
Lower yields mean cheaper borrowing.
Small companies carry that borrowing cost straight on their books.
This morning the support disappeared.
Bonds got beaten up early, which pushed yields right back up.
The Russell tracks small cap stocks.
Higher borrowing costs press on those companies harder than they press on the giants.
That gave me a bearish lean before I looked at a single signal. A lean by itself pays nothing.
The Chart Went Quiet Before It Went Anywhere
The Russell spent the morning grinding back and forth in the same price area it chopped in all night long.
Flat tape like that puts traders to sleep.
Quiet price action does something useful to Bollinger Bands.
The bands measure a range around average price, and they pull in tight when movement dries up.
A close outside a tight band marks the end of that quiet stretch. The traders who stared at the chop and got bored had already looked away.
Where The Signal Fired And Where I Wanted In
Just after ten o’clock the Russell set up a bearish Bollinger Band breakout with about a minute left in the candle.
That candle closed at 3013.4, outside the band.
The entry zone ran from that 3013.4 close up to 3014. Price only had to tick back toward the band to fill.
I pushed for a better price at 3015 and never got it.
My greed cost me the fill, and I said so out loud on the session.
Everyone who took 3014 was short with ten points of room to the stop.
The Stop And The Target Existed Before The Entry
The stop went at 3024.
Two micro contracts risked $100 from a 3014 entry.
A micro Russell contract moves $5 per point. Ten points of stop distance equals $50 per contract, which is where the $100 comes from.
The target sat at 3002.8.
The measurement came off the band break itself and gave 11.2 points of room.
Reward sat slightly ahead of risk from the moment the order filled.
A fill at 3015 would have dropped risk to $90 on the pair, and that is why I chased it.
The Stop Moved While The Trade Worked
Price broke lower and made a new low with follow-through behind it. Once the move covered more than half the distance to the target, I moved the stop to 3013.4.
That put every member at their entry price with nothing left at risk. The trade could no longer cost anyone money.
The next adjustment was written out in advance. A close lower would have dropped the stop to 3009 and locked in a gain.
Price never gave me the chance to use it.
The Trade Closed At Full Target
The Russell printed a low of 3002.6, two ticks past the 3002.8 target. Everyone in the trade collected the full 11.2 points.
Two micro contracts turned that into $112. The whole thing finished inside the first hour of the session.
I never got filled myself. The members watching did, and the call paid them.
The Rest Of The Session Backed It Up
The Euro trade added $75 after we trailed the stop into profitable territory. The Nasdaq trade cost $30.
That Nasdaq loss should have been $26 based on the price in the alert. I booked the worse number because the slippage was real, and padded results help nobody.
Official called trades finished the morning at $157. A gold Bollinger Band trade paid over $150 on top of that, though I was not fast enough to send it out as official.
Every figure there comes off a $5,000 account trading micro contracts. The same session on a $50,000 account using e-mini contracts would have run near $3,000 in that first hour.
What This Means For You
The Russell trade came together because two separate checks agreed. You can run the same checks on your next trade without adding a single indicator to your chart.
- Look at bonds before you take a small cap trade. Yields pushing up works against the Russell, and yields dropping works for it.
- Write your stop and your target down before you send the order, then convert both into dollars. Ten points on a micro Russell contract equals $50, which made two contracts a $100 risk.
- Take your fill inside the entry zone instead of hunting the perfect price. My push for 3015 cost me a $112 winner that my own members collected.
Run those three steps and a boring tape stops being a threat. The chop becomes the setup rather than the reason you force something.
Your Next Step
You just watched one Russell trade get planned, sized, and closed at target.
That happens every morning in the private trading room. Beacon prep at 9:45, the 10 AM bell, out by noon.
Year one produced 453 winning trades and eleven winning months out of twelve. A $5,000 account grew into $14,459 in net profit on small losses and bigger wins.
The full six week intensive is available on demand the moment you join. The live masterclass on Wednesday, August 26th at 1:00 PM Eastern starts you from the ground up.
Watch me trade for 30 days. One email gets you a full refund if you are not convinced.
JOIN THE 10% PER MONTH CLUB TODAY
Blake Young
Senior Market Strategist, TheoTRADE
