Problems countertrend trading the index futures

[Turveyd]

Then build that analysis into your trading plan.

If traders are worried about what the pros might do then why not learn how they trade and more importantly think and then build trading strategies that take advantage of that. Your and the pros positions will then be aligned...

I do, bet on 3rd bottom failing badly and quickly.

 

[wmwmw]

Your method is not going to work.
If this kind of trading method works, there won't be only 1% of daytraders to make consistent money. There will be 80%.
You go to a casino to play roulette, buy 36 numbers out of 38, you will have +90% probability to win each game, but will eventually lose money. But before you lose, you may win 10 games in a row.That doesn't prove you have a winning method.

To make consistent money in daytrading, one need at least two elements:
1. A pattern or a setup that has positive math expectations.
2. An entry and exit method that can help to realize your positive math expectation.

Most people fail because of lack of the second element.
But you have neither.

So here I'm asking for comments about the difficulties I experience trying to recognize a trending NQ day in time to avoid ending up with a colossal loss. In my case I'm actually trying to pass a oneup trader evaluation. I had passed the $25k a month ago but blew the funded part after it had been going very well. I encounter the exact same problem, same scenario whenever 'that day' inevitably comes.

I trade one NQ contract/trade no matter if the eval/funded account is a 25K or $50K. The pattern has become sickeningly familiar and predictable. I have a string of great days, up to 10 or so. Then the day arrives when it's quite evident to me that the institutional manipulators are out in force taking it away from the 'small outsiders', i.e. I wait for a pullback, I enter, it struggles right where I entered then fails. After several attempts to (patiently!) wait for a good entry - and several failures - before I know it I've hit the maximum allowed daily drawdown. I stay in that last trade, feeling 'trapped' since if I jump out then no more trading allowed for that day. Which is probably a good thing. But I stay in it, getting more galled by the minute/hour as I watch the slow, steady, controlled drop with a series of red bars marking lower lows and lower highs. Death by 1000 cuts. Worst case always plays out the same - I hold on until the maximum allowable drawdown is hit, failing my evaluation. Then when they've taken me out it reverses and rises 100+ ticks!

So I'm fully prepared for someone here to dub me a dumb shit with no trading discipline and an irrational fear of shorting (well the markets are largely irrational anyway). Of course when I finally figure out I should've shorted it I venture into a short and gee, it reverses and I get burned on the short! Which reinforces my fear of shorting.

Countertrend trading is hard enough on the majority of days when the market 'allows' me to take profits, but those days when it appears obvious the institutions are controlling every movement and stop-hunting, I experience outright demoralizing setbacks.

I use only the RSI to determine entry points, (no other indicators since they're all lagging anyway) and price ladder/chart action to determine when to exit. Most days this works beautifully. But on the day where the countertrend trading fails, I lose weeks of profit. On the good days I typically net $3-500/day, so my method works under the conditions I face then. But that one dreaded day wipes all of it out. Watching the behavior of the NQ movement on that day leaves me with nothing but galling suspicion about what the institutional, large market-moving insiders are doing. Against people like me anyway, their strategy always works.

So my question is, what can I do about this state of affairs, to get by the strongly down-trending days without the devastating setbacks. Any suggestions from anyone here who is successfully trading a volatile instrument like the NQ would be greatly appreciated, so I thank you in advance.

 

[murray t turtle]

Was thinking same. Sounds like no edge, seems to be common with these types of post. Always looking for that tip to get rid of the losers when really sometimes just better to move on. You change a few rules to filter out some losers, then you miss out some winners and next thing you know your right back at flipping coins.

%%
Part of it sounds like a simple math problem;
make money for ten days + lose it in one??
Almost as bad- lose one years profits in 1 day.
!}As far as a coin flip, for fun I flipped a silver coin, but before I did/checked the datre/1958 or1955 a real good year.So find something else fun.
[2]Amazing how so many + i've done it to; confuse profit with fun.[I have to make a profit/as much fun as i have??
[3]NO short system makes what a long does; discretion or FEB may do better.Trade a smaller % of your investment wins.Any investment wins??So even if you lost a hi% of countertrends; if you traded smaller countertrends/that could work.
[4] Mark Weinstein learned a ,lot from his fun/bird feeder...……………………………………………………...I almost traded a inverse ETF on Monday, but profits on upro exit were better/so I did not do counter trend/could have.

 

[BlacknBlue]

You know what the index is right? It's based on 100 stocks, although the top 5 stocks are about or close to 50% of the index. I will never understand index traders who don't look at the top 5 stocks to find better predictability in nq. Maybe start there. I only trade the top ~10 nq stocks minus a few names. I only find ultra high win rates on QQQ on the short side on day trades as the high win rates on the upside for the index are easiest made by buying pre market and holding end of day. I only find ~2 easy short setups a week on QQQ.

For these reasons I cast a lot of doubt over indicators effectiveness when day trading indexes. Using the mentioned indicators for swing trading is fine and that's when you go heavy when you find things are oversold.

You also need to consider volumes on qqq/nq and compare them with stocks and you need to consider the fact that institutions aren't day trading indexes either (as much as stocks) in the same way us traders are trying to earn income. I don't think there are a lot of winnable strategies out there day trading indexes. yes these traders exist, some even on this site, but it seems obvious to me that there are far more winnable strategies trading stocks than indexes both on the manual and algo side.

With your experience and capital I think you'll find trading tech stocks a breeze.

In regards to counter trending, I love it when I get stopped out - i just go the new direction with heavier weighting LOL. Do some back testing with a variation of D'alembert you are comfortable with.

 

[traderking007]

Yup. The most discouraging thing about this of course is that all I know is countertrend trading, I really have no 'safe' technique for entering a trend, especially if it doesn't pull back much to provide relatively safe entry points. I've come to expect days like this, after several good days. Without a strategy to recognize a day like this early on before too much damage is done so I can just shut it down and say tomorrow is another day, I'm afraid this will be a recurring problem until I have to throw in the towel.

lol! um so you cannot see or find a way to enter with trend trades but you find all kinds of ways to enter counter trend?? weird.

1 just the button that says mkt.
2 use a stop to enter duh
3 this post sounds like a bunch of garbage
4. lol
5. everyday the mkt has pullbacks if thats your entry idea.
6. maybe explain how u enter counter trend
7. counter trend trading in this environment will get u crushed

 

[Trader H.C.]

Why go against the trend when the index seems to have taken 10 cans of Red Bulls?

 

[GorillaFutures]

never understood why some traders insist on standing in front of a train. 99% of my trades when the daily chart is trending up are longs, why even bother with shorts? Yes you will take less trades but you will also have less losses. Pass on $100 to make $1000 with the trend. Not to mention when you put all the Tf's in your favor then there is a MUCH better chance the trade will go in your favor.. stop fighting the trend and jump on.

 

[tiddlywinks]

I traded NQ morning session today. Besides the fact that it didn't back and fill whatsoever (was frustrating as it just ripped up or down), I didn't find anything weird about it. In fact, it was textbook trending up

No back and fill has been going on for a week. Shorts (for me) have been targeted exits (IOW, scalps only). However, the travel of most of the with trend moves is stunning! I use 3 minute charts, and most all of my signals are volume-centric.

 

[wiesman02]

No back and fill has been going on for a week. Shorts (for me) have been targeted exits (IOW, scalps only). However, the travel of most of the with trend moves is stunning! I use 3 minute charts, and most all of my signals are volume-centric.

I’ve had to cut my contracts in half when trading nq compared to ES due to the travel and volatility. I don’t remember ever having to do this in years past.

 

[comagnum]

The NDX had its strongest Aug since the height of the dot com bull. Every small pull back has buyers standing in line miles long. This has to be a blow off top -breadth is the worst since 1999 & we all know how that ended.