(click image to enlarge chart)
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In a typical year, there are about 8-12 macro trending moves on the ES, and 2010 was indeed a characteristic year in that respect with 10 swing legs…shown on the chart above as a series of red and green arrows at the pivot highs and lows at the start of each swing.
Each of those pivot high/low arrows represent a theoretical ‘perfect trade’ entry. Of course, in a real-world scenario, it is almost impossible to catch those extremes. Instead, the goal for a disciplined swing trader is to wait for a turn confirmation, and then to try to catch as much of a trending move as is possible.
Near each swing pivot high or low on the chart above, a small red or green horizontal line is located with a sequential trade number from 1-10 in red (bearish) or green (bullish) and ideal swing trade point yield for each leg in blue. Each of those numbered lines corresponds to a ‘Big Picture’ blog post cross-referenced and linked below. Click on any numbered link to view the post that corresponds with that numbered turn on the chart above.
1) http://stopsandtargets.com/members/futures/blog/?p=176
2) http://stopsandtargets.com/members/futures/blog/?p=48
3) http://stopsandtargets.com/members/futures/blog/?p=495
4) http://stopsandtargets.com/members/futures/blog/?p=692
5) http://stopsandtargets.com/members/futures/blog/?p=730
6) http://stopsandtargets.com/members/futures/blog/?p=795
7) http://stopsandtargets.com/members/futures/blog/?p=916
8 ) http://stopsandtargets.com/members/futures/blog/?p=1006
9) http://stopsandtargets.com/members/futures/blog/?p=1310
10) http://stopsandtargets.com/members/futures/blog/?p=1400
(All numbers from expired contracts have been adjusted to the March 2011 contract on the chart above).
Note on the chart above that a good swing entry is almost never touched on a retrace after the breakout, and the breakout move is usually fast once key support/resistance has been broken..
Statistically, the 2010 macro trending moves break down as follows…
Total swing high/low extremes = 1312 points
Total swing high/low bearish = 558 points
Total swing high/low bullish = 686 points
Total ideal trade entries = 849 points (65% efficiency)
Total ideal bearish swings = 353 points (63% efficiency)
Total ideal bullish swings = 496 points (72% efficiency)
2010 was a great year for trading on both sides!
I wish everyone a happy and prosperous New Year, and thanks for reading…
‘Swinger’