When SP futures make a quick surge to a strong resistance zone, and then loses momentum at or near zone, while concurrently TICK registers an extreme high reading (usually over +1000), this sets you up for a high-probability short entry, with a hard stop just above resistance zone.

These counter-trend trades "fade" (meaning to enter a trade against trend) intraday emotional extremes, and may come at beginning of a new trend - giving you a chance to hit a "home run." More often, however, they become scalp trades that don't last long, sometimes less than a minute. Either way, they are high probability trades if you time your entry well.

It takes a lot of practice to time your entries just right on these trades, and you have to be ready to get out immediately (before your hard stop is hit) if you sense that your edge has disappeared. It is difficult to sense when edge (probability of success) of a trade is gone *before* trade changes from a small gain to a small loss. Practice will help *if* you know what you're looking for.

Most traders believe you have to wait for your hard stops to be hit before you can know that a trade's edge is gone. This may be true for most traders, but it doesn't have to be true for you.

The following guidelines will sound radical, but they have guided me in making my living from trading for many years.

1. If a trade doesn't go your way within first one to five minutes, get out. I usually get out within one or two minutes as soon as my perceived edge is gone.

2.If a trade goes against you in first few seconds, begin drawing in your hard stop and/ or your target, trying to get out of trade at break even.

3. Never let your hard stops get hit. When it happens, you may want to take a break and get some fresh air.

4.Hard stops are adjusted to market conditions. At moment (July 6,2005) I am using 1.50 point hard stops on SP futures.

5. Never move your hard stop away from your entry point, hoping that a bad trade will turn around.

6. If you find yourself *hoping* as you trade, it is a clear sign that you are not following good survival (money management) principles.

It will be impossible to put these principles together without a set of high-probability setups. Without good setups, trading is just a flip of coin.