Yesterday in Monday’s post, 5/9/16 – Double Zig Zag B-wave 2048-2058ES, we mentioned that we had a double zig zag b-wave consolidation.
As expected, today’s rally confirms that yesterday was indeed a double zig zag. This wave pattern identification provided us the confidence in our trades overnight — and the results show:
Our two trades are up $2,350. We bought the Nasdaq last Friday and despite the bumpy waves yesterday, we had the conviction to hold on based on wave pattern identification — and it paid off – as today the Nasdaq went over 4380 — we actually cashed out at 4374 for a 54 point gain from our entry at 4320. Since each point is $20 — if you multiply $20 * 54 = $1,080 in profits from the Nasdaq trade alone.
In the S&P, we initiated a bullish put spread when the ES was trading at 2044 last Wednesday. Today that trade is at 90% of max profit and there is a high probability it will expire this Friday for 100% max profit. Since max profit is close to $1,500 for this trade, the 90% mark is around $1,350.
So combine the $1,350 and $1,080 — we get close to $2,350 in profits for this week. If you’d like to follow along our trade of the week, be sure to sign up and join our private Whatsapp mobile alerts group.
We talked about this ending diagonal in the weekend video.
Here’s a video explaining the math that’s involved in calculating how much 1 futures contract equates to in terms of dollars.
In short, each 1 pt in the futures = $50. So a 10 point move in the ES = 10 * $50 = $500.
In terms of margin, each contract requires $2,813 in margin to initiate 1 contract with an overnight requirement of twice that amount at $5,626.
Go to the rest of the content and part 1 of this video on S&P E-mini Futures trading.