SMB Futures TOTD – 5/16/18

Merritt BlackFutures, Reading the Tape, Technical Plays

It’s time for the Futures Desk Trade of The Day! Here’s a link to yesterday’s trade as well.

Today we have a trade that achieved 6 to 1 R/R – This is something that is doable on a pretty consistent basis for many traders. (Many retail traders at home think that this type of R/R is near impossible.)

The trade is a simple pullback trade in the Emini S&P Futures. (ES)

Key variables:

  • Break higher out side of yesterday’s market profile value area- this is key
  • Volume and orderflow confirming the break as we head into the open- this is also key
  • Find a pullback to fade for ideal R:R as long as breakout thesis isn’t invalidated- this relies on orderflow skills

Here’s the trade below.

  • Key line in the sand broken at 2711 pre-market
  • Long at 2712.75 and flat at 2718.75 for a nice 6 handles

ES Futures. 2min chart.

The trader knew the context by using market profile. They knew what tactics to then go and apply to have the highest odds for success and quality risk/reward in their favor. Is it time to fade? Is it time to go with a trend (or “imbalance” as we call it in the Market/Volume Profile world.) Context is key.

From there it’s all about adding in skills around orderflow. When to pull the trigger, what to look for, how the market “should” behave if the trade is a valid one… they all rely on an orderflow read.

Time it, and let go of the outcome now. Professionals know that the outcome of any individual trade is 1) meaningless to their overall results, and 2) randomly distributed between winners and losers. Manage risk and let go of the outcome.

In this case the trader identified sellers creeping in and a battle beginning to form on the tape. It was time to book the profits as you see “exit” labeled on the chart.

One Good Trade.


Rinse and repeat.

Trade well,


*No Relevant Positions

Risk Disclosure