My nq price action method

slugar said:
my struggle is in a case like today the nq made a lower high around 9cst. I shorted and used 4127 as my stop. Moved 12 points in my favor only to retrace all of it and not sure when the trade becomes in valid
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For me, the round number area is strong defense level in general and if price tried to break more than once and failed, I'd consider taking profit. On the 1-min you can see a failed flag pattern around 9:45 - 9:50. That's usually good for decent counter-run and possible reversal.
 
I realized later that you're question wasn't about when to exit, but when the trade is invalid. I can't help you there, because of the timing of your entry. I'd have waited longer before shorting.
 
slugar said:
When the nq went 12 points in my favor and retraced all of the move but my stop was not hit still in trade but


not feeling to confident about when the trade becomes in valid
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PA trades are typically predicated on a signal within context …, specifically taken on the supporting PA of said signal (I'm discounting momo / time & volume entries here)


A trade becomes invalidated when that signal is no longer valid – and / or – the context in which the trade was taken is breached


Some examples of where a trade would break down


Trading a range; long the bottom / short the top

Breakdown = breach of the top…, on a short / breach of the bottom…, on a long


BO up; breakdown = breach of the upper range

BO down; breakdown = breach of the lower range

BO PB to the top…, or 50% level of a range / BO PB to the bottom…, or 50% level of a range breakdown = breach of the the level price PB to (recall we don't enter on the PB - rather the PA supporting the PB has ceased and the BO move resuming)


Note

Need to be careful with above stop placements – sometimes liquidity pools are created only to then be exploited - dem bastards :D



Trading a DT; breakdown = breach of the DT - or possibly the subsequent LHs depending on entry

Trading a DB; breakdown = breach of the DB - or possibly the subsequent HLs depending on entry

123 reversal; breakdown = the breach of TL made from the 3rd leg HL / LHs…, or…, breach of the 50%** level of the 1st leg (** 50% not always an exact – as the strength of the reversal varies - this is trading after all not science)…, or breach of the previous L or H (just prior to leg 1) – just depends on where the entry occurs

Trend (LH / HL); breakdown = breach of the TL

Trend PB; breakdown = breach of the PB range counter to original direction.., or.., breach of the TL price pulling back to

Close of 1 bar / open of the next; breakdown = breach of the L…, or H of the bar just closed - okay so I included 1 timed entry - but it could also be a form of a range / trend on a higher TF


Need more examples – say the word


RN
 
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slugar said:
my struggle is in a case like today the nq made a lower high around 9cst. I shorted and used 4127 as my stop. Moved 12 points in my favor only to retrace all of it and not sure when the trade becomes in valid
More...

We're you managing that trade at all? If so, how?
 
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