Hey Trader,
Wednesday morning, before the bell, I told the Futures Room to keep some powder dry.
It was FOMC day. I played the Fed before. ATR was sitting at 19, and my pre-market playbook said what it always says on a Fed day…
Less is more.
Then I said the part I want to talk about today.
Wednesday gave us three Golden Setups off the same level. All three paid both targets.
So what exactly did I do differently?
Not only will the answer surprise you, but it’s the key to being successful in any market.
Wednesday Paid Three Times
Quick orientation before I walk you through it. The 26 is a level on my chart, and the 33 is the line it has to hold once I’m long. Everything below is a trade off that one pair of numbers.
The first 26 set up and I didn’t take it. I was busy watching the ES make lower lows while the NQ refused to come with it, and I talked myself right out of a textbook trade.
It paid without me.
“Now I’m mad. You got to have blinders on. That’s about as textbook as a 26 as you can get, though, isn’t it? No close below 33, reaches down, grabs you.”
I got the next one. I treated it like any other 26, moved my stop to break even once it tagged the 33, and set my exits at 66 and 77.
When it reached the 62 I locked in 20 handles. When it pushed through I rolled the stop again and locked 100 at 59 and a quarter.
It ran to 76.
“Ba-boom. There’s a plus 50. Plus 50 on three contracts gets the day done.”
With the pre-market work I already had on, that put me right at 250 handles. By the time Corey came in for the second hour I was flat and finished.
A third 26 set up after that, and it was the cleanest of the bunch. One tick of heat on the whole trade.
Elizabeth Copeland came into the Golden Setup room after they were gone. I told her she’d missed them, because there wasn’t much I could do except show her the chart.
Three long 26s. All three paid 31 or better.
Thursday, The Day I Picked, Gave Me Nothing
Thursday opened 500 points above where the move started. London took the entire thing overnight while we slept.
ATR printed 9.7 in our morning session.
I asked the room when we’d last seen a sub-10 ATR live. Plenty of people in there have never seen one, because it doesn’t happen.
I was long the 56 and got stopped. I was long a 26 and took a minus 3. I shorted and got stopped at even.
Later I bought a 26 with my escape hatch engaged and the tape wouldn’t even let me out. I sat there and took the full minus 15.
“There is not enough volatility to do jack in this market. It’s because the move was stolen overnight.”
I called the session early and we went and did homework instead. There’s no reason to sit and hope something happens, and there’s less reason to force it.
You Don’t Get to Know Which One It Is
Put those two mornings side by side and you get the whole lesson.
I’ve been doing this since the pit days. I write a playbook before every session, I watch the ES, I watch oil, and I watch the expected move.
I still called the wrong day.
The session I told everyone to go easy on was the session that paid. The one I promised would be better is the one that cost me.
That happens because predicting the day and executing the day are two different jobs. One of them is a guess, and the other is a process you actually control.
So the fix isn’t getting better at picking days.
You show up with the same levels, the same brackets, and the same rules on all of them, then let a big enough sample sort out which ones pay.
That’s what the 26 did on Wednesday. I didn’t need to know it would be a good day, and I didn’t need to be right about the Fed.
I needed my order sitting at 26 with a stop and two targets attached, the way it is every single morning.
What To Do With This On Monday
Three things, and none of them take talent.
First, put your orders in on the days you don’t believe in. Your opinion about the tape belongs in your target selection, not in whether you participate at all.
If Wednesday had convinced me to stay out, I’d have watched three winners go by from the sidelines.
Second, when the day pays you, take it and leave. I told the room to make a note in the journal, draw a line under it, and treat every entry after that as practice.
I locked 250 handles on a Fed day by 10:15 and shut the platform down. The traders who kept clicking after that handed a chunk of it back.
Third, start logging your own forecasts. Write one line before the open about what kind of day you expect, then write one line after the close about what you got.
Do that for a month and you’ll see your hit rate on predictions in black and white.
Mine put Thursday ahead of Wednesday, and Thursday was the worst tape we’ve had in a long time.
Looking Ahead
The Fed is behind us now and this market has been stuck in the same chop since early August.
I want to see whether the bulls can finally convert some of it into a real leg, or whether we keep getting the move handed to London every night.
Either way, my levels go on the chart Sunday and my orders go in Monday morning.
I’ll find out which kind of day it is at the same time you do.
The level map, the bracket math, and the entry rules I ran on both of those mornings live inside my Golden Setup.
Trade smart,
Tony Rago
Creator of the Golden Setup
