Quote from eminitrader007:
Here is how I trade NQ. This is a long only strategy.
Stop Loss : 2 pts.
Target: 8-9 points.
Set-up:
1 Min chart and 5 Min Chart with 4 period High-Low Price Channel.
Entry:
Step 1: Price needs to go below 4 P low.
Step 2: Wait till you get a bar that does not make a new low.
Step 3: Price needs to go below the previous low from Step 1 and has to be a down bar.
Step 4: Wait till you get a bar that does not make a new low.
Step 5: Look at the 5 min chart and make sure that the low from step 4 is above the 4 P low on the 5 min chart.
Once all the conditions are met buy at 0.5 above the low from Step 4.
Stop Loss: 2 points
Target: Low of 5 min chart + 10 points.
Trailing Stop: Once price goes above the high on the 5 min chart, your stop will be the low of 5 min chart.
Here is an example. This is from yesterday and it is the June contract.
All times are CST.
Step 1: At 13:24, the low is lower than the previous 4 P low. Next 2 bars make a lower low. The low is 1477.25.
Step 2: At 13:27, price DOES NOT make a lower low.
Step 3: At 13:31, the low (1476.75) is below the previous low (1477.25) from Step 1 and the bar is a down bar.
Step 4: At 13:32, the price DOES NOT make a new low.
Step 5: Now let's look at the 5 Min chart and make sure that the low 1476.75 is above the 4 P low.
Step 5 Contd: The current low is 1476.25 which is lower than our low of 1476.75. This is our entry signal.
Buy-limit 1477.25
Stop: 1475.25
Target: Current 4 P low (1476.25+10) = 1486.25
The chart below shows what the market did.
There were 2 set-ups this morning. The first one was at 8:28 CST and the second one was at 12:16 CST and both were profitable.
In addition to the above conditions, I am adding the following rules to filter the best trades.
1. ND TRIN > NYSE TRIN ......Pass the trade
2. NYSE TRIN > ND TRIN...... Buy at .5 below the 4P 5 min chart
3. ND TRIN and NYSE TRIN < 1....Use the above set-up.
When the market is making new highs and TRIN is increasing above 1.....Look for reversal.
Similarly, when the market is making new low and TRIN is decreasing below 1....Look for reversal.
One of the things that I have learnt is that even if we make 25 NQ points a week trading 1 contract that adds up to $25,000 a year. With a $20,000 account you can trade 4 contracts risking 1% per trade and if we can get 25 points per week....you do the math.
Looking at the long-term chart I think we could see 880 in SP before we move higher.