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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.
Mike Reed is author of TradeStalker's RBI Trader's Updates. Mike has been trading the Market for 23 years. His support and resistance numbers have been published on the internet since 1996. His nightly support and resistance zones are specific and incredibly accurate. He offers an unlimited free trial of his nightly TradeStalker RBI Trader's Updates. http://www.TradeStalker.com - Copyright 2005 Mike Reed