A Professional Approach to Trading Futures

[steven46]

Here is the weekly cycle showing price action on chart with 30 minute candles on the right
and 15 minute candles on the left

Reset Wednesday is our primary reference, because (as it showed last week), institutions decided
to make adjustments on that day, and the effects rippled though the markets on Thurs and Today (Friday)

Using the lows (Thurs & Friday) allowed me to make good trades both days

Good luck

 

[steven46]

For those unfamiliar with an institutional approach we have updated the previous chart
hoping to make it easier for retail traders to understand

The chart on the left shows an example of the "Overnight Drift" as researched by the NY Fed
Interesting that this isn't of more interest. Not one person here has inquired about it and yet
it is most reliable way to make money bar none (google it).

Good luck

 

[steven46]

Hello London & Euro Traders

Here are the pending High Impact Economic Reports for the week
-------------------

NY Session Outlook – S&P 500 E-mini Futures​

This document provides a professional institutional-style outlook for the upcoming NY Session, combining high-impact macroeconomic releases with an intraday regime and scenario analysis based on the provided S&P 500 E-mini Futures chart.

1. High-Impact Economic Releases​

Monday:
- ISM Manufacturing PMI (10:00 am EST) – High impact

Tuesday:
- JOLTS Job Openings (10:00 am EST) – Medium impact

Wednesday:
- ADP Employment Change (8:15 am EST) – Medium impact
- ISM Services PMI (10:00 am EST) – Medium/High impact

Thursday:
- Bank of England Rate Decision (7:00 am EST) – Global risk impact

Friday:
- U.S. Employment Situation Report (8:30 am EST) – Highest weekly impact

And our Scenarios

NY Session Scenarios

Scenario A – Bearish Continuation (Primary):
- Failure to reclaim prior session value
- Rejection at VWAP or London session resistance
- Acceptance below prior NY lows

Scenario B – Mean Reversion / Short Covering:
- Oversold open with inability to continue lower
- Responsive buying into early NY
- Rotation toward VWAP before sellers re-engage

Scenario C – News-Driven Reversal:
- Strong labor or macro surprise
- Sharp impulse move followed by pullback
- Structure flip confirmed by higher low above VWAP

Regime Identification

The 1-hour ES chart reflects a transition from an upside rotational environment earlier in the week to a late-week downside regime. Early week sessions showed controlled higher highs with acceptance, particularly during London and early NY trade. However, Thursday marked a clear regime shift as price failed to sustain prior highs and initiated directional selling.

Friday follow-through selling confirmed distribution and a bearish intraday bias. The structure now shows lower highs, weaker acceptance above VWAP, and downside continuation into the close.

For this type of day, we would monitor only for 30 minutes, waiting for the early discovery process
to unfold. We would enter a position based on clean break to either side, although we favor downside
continuation early.

 

[steven46]

The London Session is fast drawing to a close. We stayed up to trade
what is for us, an "Overnight Drift" condition. Although the setup was not
perfect, it was close enough that we were willing to accept risk in order to
obtain a windfall return. In this case it was +30 pts

Regarding the New York session which starts in about an hour, we will stay up
long enough to monitor price action and if we see a reasonable entry at the
close of the IB, we may give it a go on smaller size.

Good luck

 

[steven46]

Hello Traders

Posting this chart showing the result so far
The day was interesting in that it was different than expected
The preferred scenario (Rotation lower) did not play out. Readers who
followed my previous post saw the "Overnight Drift" THEN if you look at the chart
you can see that price "reclaimed" territory (Previous New York Session low first,
then (at the New York Open) again it "reclaimed" the previous session Value Areas Low
and High. It is no coincidence that at 6pm, when the report was released, price was AT
this area (that is what institutions wanted) and algos were activated to move the market higher
and defend both the VWAP (buyers were willing to buy above that price) and the 9 period ema
When it is this obvious, professionals do one thing and one thing only (buy on shallow pullbacks).
Easy day for skilled traders

 

[steven46]

Hello Traders

Here on the West Coast USA, it is Friday night, and we have had another "gift" session
in that it followed a cyclical pattern that we have seen so many times in the past.

For those unfamiliar with the Weekly Cycle, We divide the week into a front half (Monday through Wednesday)
and a back half (Wednesday through Friday). We treat Wednesday as a transitional day, where control of the market
can and often does reverse. On this chart we show sellers in control until price reaches an area that institutions define
as "trading at a discount to fair value". At that point, buy volume enters to capture that value, mark it up, and distribute
at a premium, and it is no surprise (to us) that this occurs on a Friday. What IS remarkable is that we never hear retail traders
making use of this concept. Once you understand it, it allows you to know whether to hold, or take scalp profits during a
particular session. Looking at all the other strange approaches to trading, it becomes obvious that most retail traders don't know
when to hold and when to get out. The bottom line is that you trade too much and even it you are pretty good, you end up
giving it all back (and more).

Good luck

 

[steven46]

For those who MAY wish to learn more, please note the following.
I teach math, I know statistics and quantitative methods and yet
I only use a small fragment of that knowledge to trade. Why? Because
what is most useful to a trader is 1) basic ability to think critically (also known
as "common sense"), 2) The ability to control your emotions, meaning that you
can watch while the market opens, knowing that you might miss a move, but
confidence that later in the session, there will be opportunities to make money.
3) Discipline necessary to wait for the right time to enter (and exit). Obtaining
these skills is the real difference between a retail trader who gets chopped up
or gives everything back by overtrading, and a skilled professional who can
identify the right conditions (when to wait and when to act). My mentor explained to me
that trading is like working a puzzle and you have set a timer. You have a certain time
in which to figure out where the pieces fit together. Once that timer goes off, its
simple accounting, you either win or lose.

 

[steven46]

For those who did not choose to engage AND for those who did but did not stay in touch
I want to post this important example of what institutions call "context" before I stop posting
on this website.

My mentor taught that "Context is Everything", meaning that a trader must 1) understand and then be
able to 2) identify the specific data that are important to institutions, because ultimately THEY decide whether
to move markets higher or lower, as well as 3) at what price & time.

This example shows something that most of your have no clue about. Institutions divide the market into
time periods, each period contains an "initial balance" during which they decide whether the current price is
"fair", followed by a period of inventory positioning (what retail traders mistakenly call a "setup"), followed
by a directional move higher or lower OR if the market is anticipating economic news, a trading range (sideways)

Good luck

 

[steven46]

My analysis of Friday's chart

1. What the Chart Is Actually Showing (Structural Read)

A. NY Session Structure

• The New York session opens with acceptance above VWAP/EMA, followed by persistent one-time framing higher.
• Pullbacks are shallow, overlapping, and bought, consistent with passive accumulation rather than initiative breakout chasing.
• This is not an emotional trend day — it is controlled inventory building.

Key tell:
Price grinds higher without expanding range → institutions are working size, not chasing momentum.

B. Last Hour Behavior is Critical

• During the last hour, price accelerates vertically, not through broad participation, but via thin liquidity.
• The candle annotated with ~99.7 contracts sold is revealing:
  • Price lifts despite aggressive selling.
  • This implies absorption, not distribution.

Interpretation:

Institutions absorbed sell pressure into the close.

Sunday Evening Gap Up

Confirms:

• Overnight repricing once cash-session liquidity constraints are removed.
• Dealers and systematic flows re-aligning above Friday’s acceptance zone

Scenario 1 (Directional Bias to the Upside)

1. Gap-and-hold above VWAP → continuation
2. Early dip into prior VWAP / EMA → responsive buyers
3. Failure only if:
   • Price accepts below Friday VWAP
   • AND CVD confirms aggressive selling with range expansion

 

[steven46]

Interesting session

The outline presented in the previous post
shows the framework.

The basis is (was) the previous New York Session MOC imbalance
and the way that the market reacted, suggesting this would occur
One would think that a perceptive person would see this and want to
learn how to obtain a relatively low risk profit

It does not happen every day (of course) and on the days it does not
we teach two approaches, the first to stand aside (capital preservation)
and the second to trade the "trap" (we have spoken about trapped volume
on many occasions). The purpose of this and most recent posts, is to show
how professionals create, (and maintain) a successful business model.

Success in this endeavor requires that you find someone willing to teach you
the following

1) The underlying logic used by institutions
2) How to think like they do
3) How to identify the right conditions for low risk trading
4) The simple setups
5) The timing (when to enter, how to manage the position, and when to cash in)

As I have said to those who have watched me trade, the emphasis is on preparation
and so those who are intellectually lazy never do well. This is why I have discouraged observers
from thinking to simply copy my trades. Surely it will work, but why? when you could
learn the system and be free for the rest of your days, to conduct business as you see fit.

Good luck

 

[steven46]

Hello Traders
As mentioned in a another thread. I am experimenting with a funded company called OneUp
I purchased an account and will trade it to see how it goes. My intent is to write a series of articles
about this industry. So far, no complaints about OneUp, They have been helpful and reasonable
and I expect to exceed the requirements and request a payout quite soon. Today however is not
going to be a great day. I have not slept well and my rule is to either stand aside or trade small
for the obvious reasons. Attaching my chart and early PNL I am NOT trading my personal account
just the OneUp today

Attaching my chart and updated PNL for those who might be interested.

Postscript

I went back to sleep until about an hour ago and did not do much. As I thought this was not
a very good day. I will assume that I can sleep better tonight and do a much better job of trading
again tomorrow. The lesson for this session is that it is better not to trade when you are impaired
by lack of sleep or any issues of life that my distract you. Final PNL posted just now.



Good Luck

 

[steven46]

Not enough time to post my pre-market prep
The bottom line is that prior to the NY open, an economic report
was released that was initially thought to be favorable (about the US economy)
however that meant that the odds of a rate cut were less, and so the market sold off early

In professional terms, the market tried to break out above previous value, and failed (about 70%
of breakouts fail within 5 candles), so (as mentioned on the chart) this was an easy short and hold
Take profit at the Previous Session VAL, and wait for the market to decide what to do. At the low
Institutions decided to buy the discounted inventory from the previous MOC imbalance (I talk about this
and teach it to others) and so that is also an easy low risk reversal. You wait for price to "reclaim" Previous
Value, then you enter on the retest. From a professional point of view this is (well I was going to say "textbook"
but really this isn't in any book you can buy). You have to find the right person and learn it from them.

Good luck with that.

 

[steven46]

The MOC imbalance as a Trading Tool

At the end of the New York Trading Session, a specific Auction Process occurs, at 3:50pm ET. This "Closing Auction" often (but not always)
creates a surplus of orders, known as a MOC (Market on Close) imbalance. From this point in time until the close 10 minutes later, dealers
institutions, and others use this to rebalance, to close out, and to position themselves for the next period of time. Below we attach a
description of today's MOC imbalance
-----------------------------------------------

Despite the late-day buy pressure indicated by the MOC data, the S&P 500 finished the day virtually flat, down 0.34 points (less than 0.1%) at 6,941.47.

• Early Session Strength: The index opened at 6,976.48 and reached an intraday high of 6,993.48 following stronger-than-expected January hiring data.
• The "Warsh Shock": Momentum faded as investors digested the nomination of Kevin Warsh as the next Fed Chair, which sparked concerns over a "higher-for-longer" interest rate regime.
• Sector Rotation: While megacap tech and AI software stocks faced selling pressure, investors rotated into safe havens like Energy (Exxon Mobil rose 2.6%) and defensive sectors like Utilities.
• Closing Auction: The $1.3 billion buy imbalance helped the index stabilize near its prior close, counteracting the bearish sentiment triggered by the revised 2025 employment data and the psychological break of the Dow below 50,000.

------------------------------------------------

MOC Imbalance Details
The imbalance report, released 10 minutes before the closing bell, provided a snapshot of institutional demand that must be paired off in the closing auction.

• Net Imbalance: $1.3 Billion (BUY).
• Total Count of Imbalances: 61 buy-side imbalances vs. 32 sell-side.
• Share Volume: Approximately 16.6 million shares on the buy side compared to 16.9 million shares on the sell side.
• Context for Traders: A $1.3 billion buy imbalance is considered "larger than usual" (often benchmarked at >$1 billion), signaling significant "big money" pressure to accumulate positions regardless of intraday volatility.

----------------------------------------------------

How to use the MOC Imbalance

To use this imbalance, we attach an Anchored VWAP at the open of that candle, which for a chart using 3 minute candles, occurs at 3:57ET

On that chart you see two (2) white lines, the lower line extends back to the 3 minute candles at 3:57pm ET, and the higher white line
extends from the NY open. This creates what Brian Shannon calls a "Pinch". We encourage traders to read about Brian's work using
Anchored VWAP.

It might be unrealistic to expect anyone to engage, however, this tool is important. In fact it is the BASIS for the system that I teach
and that most institutional traders use. Its in common use by professionals. This is why Retail Traders are mostly losers. They don't have
access to the tool, OR they simply don't know how to use them and they are competing with professionals who do.

Good luck