ES 5min Challenge
Past challenge from 2026-03-01. See the correct answer and explanation below.
SCENARIO
ES is trading at 5,420. Price has been in a tight range between 5,410 and 5,430 for the last 90 minutes. A strong bullish engulfing candle just closed above 5,425 with volume 2x the 20-period average. The 20 EMA is flat, and price is sitting right at the VWAP.
Market Context
Market opened with a gap up but immediately sold off to fill the gap. Now consolidating near the open price. No major economic releases today.
Key Levels
Despite the bullish engulfing candle, price is trapped in a tight range with a flat EMA. The range high at 5,430 is only 10 points away, offering a poor risk-reward ratio. Wait for a confirmed breakout above 5,430 with follow-through, or a clear rejection back to 5,410. Trading inside ranges is one of the most common ways prop firm traders blow their daily loss limits.
Prop Firm Implications
With FTMO daily loss limit of 5%, a 10-point stop on ES would barely register, but the poor R:R makes this a losing strategy over time.
TopStep trailing drawdown means every losing trade permanently reduces your buffer. Do not waste it on low-probability range trades.