Trend Trading ES with ATRTrading the ES on Friday resulted in a gain of 17.75 points. Entry criteria was fairly simple.

  1. Identify trend of higher timeframe.
  2. Are there any ADX magenta peaks?  (NO)
  3. Go to lower timeframe (3 Minute chart).
  4. Trade only in the direction of the higher timeframe (45 minute chart)
  5. If price goes to within a predefined number of ticks of the ATR (plus sign), enter.
  6. Stops are automatically plotted, including an aggressive stop that kicks in once price moves in your favor a predefined number of ticks.

Using the 45 minute as a filter (the trend was down), there were six trades during the US session.  The trades and the results were:

  • Trade #1:  Short @ 2017.50, Exit @ 2011.50
    • Profit:  6 Points
  • Trade #2:  Short @ 2013; Exit @ 2016.25
    • Loss:  3.25 Points
  • Trade #3:  Short @ 2011.50, Exit @ 2007.25
    • Profit:  4.25 Points
  • Trade #4:  Short @ 2006.25; Exit @ 2009
    • Loss:  2.75 Points
  • Trade #5:  Short @ 2008.75, Exit @ 2001.25
    • Profit:  7.50 Points
  • Trade #6:  Short @ 2004.50, Exit @ 1998.50
    • Profit:  6 Points

Trading the ES – 45  and 3 Minute Charts

Trading the ES 45 Minute Chart

Since the 3 Minute trading chart shows the full day, you will need to click on the chart to expand it.  The green numbers correspond to the trades numbers listed above.  While there were some long positions, we cannot take those because we are using the higher timeframe to filter the trades.

Trading ES ATR Strategy

Using the higher timeframe when trading the ES to filter trades and, since we did not have any ADX magenta peaks on the 45 minute, we knew that we had to be trend trading throughout the day using the ATR stop indicator.  The Dow and NQ gave similar results using the same filter (45 minute chart) to enter on a lower timeframe.