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This is a setup that I have had success with recently. I really like the concept of AB-CD patterns and measuring the move from A to B with extensions. I watch for trades that form especially in the morning in the directon of a Gap Fill when there is a reasonably sized Gap ... and wait for a Pullback to the 50%-61.8% range. I usually insist on the 61.8% being hit. Then, if I see Volume picking up I may enter at a Bar that closes Above the High of the Lowest Bar in the 50-61.8% zone ... OR Wait to see if price gets momentum behind it, breaks the 100% Recent High and Buy it on a Pullback. This confirmation generally has more risk but more success too. Sadly, you can't have one without the other. I took a scalp early today (for me) at 10:12 and when price failed to go through the High I waited for a larger retracement to form and then realized the AB-CD setup was unfolding. I went for a quick break and when I returned realized I had missed the first entry possibily shown in the chart with the Blue Circle. So I waited for a break of the high an pullback and enter at 832.50 on a limit order for 2 contracts. This price was picked as it was 1 tick above the recent high on the WRB bar at 10:21. But I would have been willing to enter on a Buy Stop at 1 Tick above the 100% Former High shown at 833.00. This was't necessay as I got filled within 1 tick of the bottom and price jumped up towards the Gap fill. At this point I am looking for a 1st Target exit at the Gap Fill price of 835.50 which was hit. Now, I noticed that the YM still had a way to go to fill its Gap so the chances were that the ES would continue at least as long as it took for the YM to fill. This happened to coincide roughly with my 2nd target (the 161% extension) which had a Tick Extreme and I exited again with 1 tick of the top of the move. I wish that all my trades were this nicely executed. If you are looking for a trade setup to may money, Look for repeatable patterns like the AB-CD. I recommend buying Suri Dudella's book on Patterns.
How do you handle leverage with the E-mini's? I'll use an example: Lets say you have a 100K $ account Lets say your max risk for a trade is 2% of the capital Lets say you use a 2.5 point stop for ES 2.5 x 50$ = 125$ 2% of 100K = 2000$ 2000/125= 16 So your trading size would be 16 contracts (or for each 6250$ you take 1 contract). Is that a good ratio? When do you "become" over-leveraged?