How to use 150day moving average to trade NQ?

[helpme_please]

I would like to do longer term trading on the NQ using end-of-day data. The problem is that each NQ contract is 3 months (or 90 days). How can a longer-term trader use 150 days moving average on a NQ contract which does not last >100 days? How do elite traders solve this problem?

Is it advisable to use the Nasdaq 100 index chart for this purpose to trade NQ?

 

[Gotcha]

Your platform should be able to give you a continuous contract. Some platforms build it from each individual contract, others have a slightly different symbol for the continuous contract than from each forward month. But you should be able to easily get something like this. I put on the 150 EMA on there for you to see.

 

[helpme_please]

Your platform should be able to give you a continuous contract. Some platforms build it from each individual contract, others have a slightly different symbol for the continuous contract than from each forward month. But you should be able to easily get something like this. I put on the 150 EMA on there for you to see.

View attachment 175543

Thanks a lot for your help to a newbie who is still learning.

May I ask do NQ continuous contract charts have gaps every 3 months due to the rollover and contango/backwardation effect? Or are these effects smoothed over by the vendor for the purpose of chart analysis? I don't see noticeable gaps on your chart, though.

 

[Gotcha]

Thanks a lot for your help to a newbie who is still learning.

May I ask do NQ continuous contract charts have gaps every 3 months due to the rollover and contango/backwardation effect? Or are these effects smoothed over by the vendor for the purpose of chart analysis? I don't see noticeable gaps on your chart, though.

It all depends on what the setting is based on the contract roll-over rule and the back-adjustment.

First, the contract rollover can be on either a Thursday or Friday, depending how you set it up.
Then, it can be back adjusted or not.

Me personally, I rollover on the Friday, since the volume ends up being greater by the end of the day on Friday for the new contract. And I don't back-adjust anything. If there is any key level, its usually far away, so it would take a few days to get there, and then the back-adjustment wouldn't make much of a difference I don't think.

On an hourly chart, yes, you would see a gap, but this type of gap is just as likely on a Sunday opening from the Friday close, so its not so unexpected. On a daily chart, you will never notice it as the daily action will more than likely overlap with the close from the previous day of the previous contract. Its possible of course to have a gap on the daily, but I don't recall seeing one in the past few years.

 

[tortoise]

It all depends on what the setting is based on the contract roll-over rule and the back-adjustment.

First, the contract rollover can be on either a Thursday or Friday, depending how you set it up.
Then, it can be back adjusted or not.

Me personally, I rollover on the Friday, since the volume ends up being greater by the end of the day on Friday for the new contract. And I don't back-adjust anything. If there is any key level, its usually far away, so it would take a few days to get there, and then the back-adjustment wouldn't make much of a difference I don't think.

On an hourly chart, yes, you would see a gap, but this type of gap is just as likely on a Sunday opening from the Friday close, so its not so unexpected. On a daily chart, you will never notice it as the daily action will more than likely overlap with the close from the previous day of the previous contract. Its possible of course to have a gap on the daily, but I don't recall seeing one in the past few years.

In this sort of game, the goal is to chart in line with what the majority are charting. That way you can be sure that the price levels that you identity on the basis of confluence are the same as those that have captured the collective eye of Mr Market.

No such poll is available, of course, but my subjective impression is that the back-adjusted continuous contract dominates.

Still, I'd love to hear from others about this...

 

[Overnight]

Looks like Gotcha is using SierraCharts... Here is the same time period with NinjaT. OP, you have many options.

 

[Gotcha]

Looks like Gotcha is using SierraCharts... Here is the same time period with NinjaT. OP, you have many options.

Its interesting how we have some differences in our charts. Biggest one I see is the down spike in November on election night. Mine clearly has the low go right through the MA and yours doesn't have that. Perhaps your daily chart isn't using the overnight session?

I also tried to combine the two charts, match them up as best as I could by focusing on a few "humps", and as it progresses, they get out of sequence. Perhaps one platform counts days differently, like holidays, and so things get out of sequence for this reason.

 

[Overnight]

Well, our data sets may be different. For example, I plugged in 700 days for the chart, but I think the EMA is different. What are your exact settings on the chart you posted, plus the indicator settings? They should match equally if we match settings.

 

[Gotcha]

Well, our data sets may be different. For example, I plugged in 700 days for the chart, but I think the EMA is different. What are your exact settings on the chart you posted, plus the indicator settings? They should match equally if we match settings.

My settings are simply using daily data. There are actually two different data sets that the platform collects though. One is intraday data, and one is daily data. The daily data is a very small file of simply high, low, open, close and volume I believe. The intraday data is every tick. The daily data though should still have the same high and low and close.

The MA should be using the close price for the calculation. For my MA, its set to a period of 150, and its an exponential MA. Sierra gives you the choice of many different moving average calculations. The difference initially could be based on how many bars are loaded since you would need 150 bars before the first bar shown to get a true average of the previous 150 bars.

The real difference seems to me to be that some days are skipped in one of our charts. A holiday for example might be tacked onto a previous day. It looks like the number of bars you and I have are different.

Not that any of this matters mind you, but its just interesting.

 

[Overnight]

My settings are simply using daily data. There are actually two different data sets that the platform collects though. One is intraday data, and one is daily data. The daily data is a very small file of simply high, low, open, close and volume I believe. The intraday data is every tick. The daily data though should still have the same high and low and close.

The MA should be using the close price for the calculation. For my MA, its set to a period of 150, and its an exponential MA. Sierra gives you the choice of many different moving average calculations. The difference initially could be based on how many bars are loaded since you would need 150 bars before the first bar shown to get a true average of the previous 150 bars.

The real difference seems to me to be that some days are skipped in one of our charts. A holiday for example might be tacked onto a previous day. It looks like the number of bars you and I have are different.

Not that any of this matters mind you, but its just interesting.

How many days back are you looking on your chart?