ES Setup From Low

Often pre-market setups aren't worth bothering with due to lack of volume and the fact that on any given day economic reports are due out. Therefore, I send most of my time scanning markets for potential trade setups that I might consider during the regular session.

Today, I came across this set up in the eminis, that was perfect for illustrating how I use elliott wave to trade. 

Note: This is a hypothetical trade that was made for training purposes!

DETAILS:

1. I saw a pattern that I recognized as a w-x-y that completed where w.y = w.w at 1393.75 with .786 support  and 1390.5 swing low directly below the market. 
2. Entry at 1395.25, (2) cars, initial stop at 1393.50

My initial target for this trade was 1398, then a test of 1400's. 

Dropping to the 1-min chart, you can see the first objective was reached where I took off one contract for 2.25 pts or $112.5. I got caught on the second contract looking for the market to subdivide higher. Notice the initial decline from 1398 was sharp! I could have exited earlier but I wanted to illustrate  how the market always gives you another opportunity to get out before it buries you. The key is "not to panic"!

Since all market movement is either in three or five waves, you look to get out on the first retracement. As shown, I exited just above the .382 retracement at 1396.75 for 3/4 pt or $75.

You might ask why I didn't wait for the .618 to exit.  Something to ponder! What if you're still waiting for that level? 

TRADE RESULTS:

(2) contracts

3.75 pts profit

$187.50

Best of Trading 

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