Trading NQ via Price Action
- Thread starter k p
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Thanks for sharing this ND because I see it too! I have read before that the very best traders can completely change their opinion of the market on a dime. Its kind of like the Douglas quote a couple of days back about being firm in your rules but loose in your expectations.
Kp.... There's nothing wrong with trading live instead of SIM.. Everyone learns differently.. Some people treat SIM like it's real live trading and some people don't.. So I can understand fully on where you are coming from.. Just keep working on your plan and learn from your mistakes.. When you make a mistake promise yourself you will not make that mistake again..
Thanks MarketAddict... I appreciate your input. (I hope you're one of the guys making a killing and hence know what you're talking about! LOL)
I do absolutely understand where everyone else is coming from, and this is the advice that I would give anyone else as well... I just can't take it myself. As you say, making sure to not make the same mistake is the vital part. And its in this statement that I think I'm using to back up my live trading. The lesson is just that much better learned than if it was only in SIM. I think it would be different if I was blowing up my account, but this isn't the case at all. The important thing is to make sure that the trades are according to plan, and that losers aren't held just hoping and wishing, but of course if there is a plan, then the exit strategy should also be fully in place before that trade fills.
For the record, I do still think that starting in SIM would have been better and I could have been further along, but if this is a fight I continue to have with myself, then I obviously have to find a work around. I just need to focus on making sure the entries are legit... this is what I'm after. Even if the trade doesn't go anywhere, its fine. If the profit is taken too soon, its fine. But as long as the entry is justified, and losses are kept small, even if the profits too are small, I think I am still making progress.
Quick update.
A & B - Two SL's going into today, shallow and steep.
C - DL.
D - Solid break below the DL... lets wait for a RET.
E - Poke below the OL, but is quickly bought up. Buying above this bar, the bar that rejects an OH or OL really needs to be explored.
F - First RET for a long, but not one I take because the RET doesn't happen above the SL. To the left is so much activity, so we are right in the middle of this range. On the plus side, the swing low at G is above the 50% of this up move, so if a trend starts, I can always buy the next RET that clears this range.
G - For testing purposes, here would be the stop for the long at F. I have been seeing far too many slight penetrations of the stop by a few ticks, which would stop me out, only to have price go back above. So I think the trick is to wait for the next bar after the penetration and not have an automatic stop loss just below the swing low. (the automatic stop loss might be a disaster stop 10 points away... which is only $200 on 1 contract anyway, so not quite a disaster, but something that would prevent financial ruin in case of technical problems)
H - We stop just short of the shallow SL before turning down. The long does not reach 1:1.
J - We do ultimately break below that swing low at G, so if the long at F was taken with the intent of reaching at least a 1:1 profit, this trade doesn't work. But like I said, it didn't set up properly and this is where context really comes in.
K - Although this can be considered to be a RET, the bars with the same height, in my testing I saw these fail more often than the better type of RET which has a crest/trough. This RET does happen above the SL which is good, but its just not the right type of RET and I'm not liking the context. I would only use this type of RET as a reason to get into a strongly trending market where you just have to get in somewhere, but this is not what we have today.
L - So here we break the previous swing low which I could have used as a stop for the long at K if taken, and hence this trade would be a loss as well.
SUMMARY
So no trades today. I find it interesting that we have nicely bounced off the overnight levels. I tried to build a plan around this months ago, but didn't get far because I saw it didn't work often enough. Given the context of today, the huge drop yesterday and the sideways overnight action, a trading range type of day makes sense. Taking REV trades at the overnight levels would have worked very well. At the time, I just didn't understand enough about testing a method that had positive expectancy with clear ideas of where stops should be. Perhaps if I dug into it now again, I could really come up with something good.
The fact that after a down move, there is no RET for an entry to continue with the trend is sometimes a good sign that price will be moving in the opposite direction, so having this in the back of your head and building a trading plan around it can be profitable, especially when this happens at a level you're watching. This is after all the first trade that I took yesterday, the short that bounced off the OH, but I didn't take it today because of the context.
A & B - Two SL's going into today, shallow and steep.
C - DL.
D - Solid break below the DL... lets wait for a RET.
E - Poke below the OL, but is quickly bought up. Buying above this bar, the bar that rejects an OH or OL really needs to be explored.
F - First RET for a long, but not one I take because the RET doesn't happen above the SL. To the left is so much activity, so we are right in the middle of this range. On the plus side, the swing low at G is above the 50% of this up move, so if a trend starts, I can always buy the next RET that clears this range.
G - For testing purposes, here would be the stop for the long at F. I have been seeing far too many slight penetrations of the stop by a few ticks, which would stop me out, only to have price go back above. So I think the trick is to wait for the next bar after the penetration and not have an automatic stop loss just below the swing low. (the automatic stop loss might be a disaster stop 10 points away... which is only $200 on 1 contract anyway, so not quite a disaster, but something that would prevent financial ruin in case of technical problems)
H - We stop just short of the shallow SL before turning down. The long does not reach 1:1.
J - We do ultimately break below that swing low at G, so if the long at F was taken with the intent of reaching at least a 1:1 profit, this trade doesn't work. But like I said, it didn't set up properly and this is where context really comes in.
K - Although this can be considered to be a RET, the bars with the same height, in my testing I saw these fail more often than the better type of RET which has a crest/trough. This RET does happen above the SL which is good, but its just not the right type of RET and I'm not liking the context. I would only use this type of RET as a reason to get into a strongly trending market where you just have to get in somewhere, but this is not what we have today.
L - So here we break the previous swing low which I could have used as a stop for the long at K if taken, and hence this trade would be a loss as well.
SUMMARY
So no trades today. I find it interesting that we have nicely bounced off the overnight levels. I tried to build a plan around this months ago, but didn't get far because I saw it didn't work often enough. Given the context of today, the huge drop yesterday and the sideways overnight action, a trading range type of day makes sense. Taking REV trades at the overnight levels would have worked very well. At the time, I just didn't understand enough about testing a method that had positive expectancy with clear ideas of where stops should be. Perhaps if I dug into it now again, I could really come up with something good.
The fact that after a down move, there is no RET for an entry to continue with the trend is sometimes a good sign that price will be moving in the opposite direction, so having this in the back of your head and building a trading plan around it can be profitable, especially when this happens at a level you're watching. This is after all the first trade that I took yesterday, the short that bounced off the OH, but I didn't take it today because of the context.
Attachments
So testing is going great, but here is the type of day that really messes me up.
First thing to note is that when you have a great trending day, you can simply do no wrong by buying each RET. The swings lows act as great stops and they are never penetrated and hence you'd never be stopped out.
But follow me here.
A - So just before the open, price spikes up to here on some news perhaps. Overnight there has been a nice trend up, and although we retraced this entire spike up, we still have higher lows.
B - So although I might be inclined to buy this first RET here, I will hold off until we clear A.
C & D - This is good because we have this series of lower lows to mess with you.
E - Here we have a wonderful move up to clear that range.
F - So this is our first RET to go long, and whether the entry is 1 tick or 1 point above, you're filled.
G - This little swing low could be the stop, and its an excellent place to put a stop that works well often.
H - Trouble is that here we form a lower low, just like below at C.
I - And yet another lower low, just like at D.
The rest of the day price just kept trending up.
So I'm not sure what to do about days like this. These bars are small which is good, but rules are rules, and a stop placement that is based on what's happening in the market such as swing points is an excellent strategy. I could just take the exit and be prepared for re-entry, but here I would get in twice and stopped up twice before price continues higher.
My way out of this like I mentioned earlier could perhaps be to wait for the next bar. Let one bar penetrate, no matter how low it goes, but see what happens on the next bar. If its quickly bought up, then no reason to get out, and hopefully the disaster stop is far enough away that it doesn't get triggered. Often price going back up within the same minute. I am also using the idea of the RET as a reason to exit. Unless a RET sets up to take a trade in the opposite direction, perhaps there is no reason to exit the trade just becaue a swing low is breached.
Anyway... that's it.
First thing to note is that when you have a great trending day, you can simply do no wrong by buying each RET. The swings lows act as great stops and they are never penetrated and hence you'd never be stopped out.
But follow me here.
A - So just before the open, price spikes up to here on some news perhaps. Overnight there has been a nice trend up, and although we retraced this entire spike up, we still have higher lows.
B - So although I might be inclined to buy this first RET here, I will hold off until we clear A.
C & D - This is good because we have this series of lower lows to mess with you.
E - Here we have a wonderful move up to clear that range.
F - So this is our first RET to go long, and whether the entry is 1 tick or 1 point above, you're filled.
G - This little swing low could be the stop, and its an excellent place to put a stop that works well often.
H - Trouble is that here we form a lower low, just like below at C.
I - And yet another lower low, just like at D.
The rest of the day price just kept trending up.
So I'm not sure what to do about days like this. These bars are small which is good, but rules are rules, and a stop placement that is based on what's happening in the market such as swing points is an excellent strategy. I could just take the exit and be prepared for re-entry, but here I would get in twice and stopped up twice before price continues higher.
My way out of this like I mentioned earlier could perhaps be to wait for the next bar. Let one bar penetrate, no matter how low it goes, but see what happens on the next bar. If its quickly bought up, then no reason to get out, and hopefully the disaster stop is far enough away that it doesn't get triggered. Often price going back up within the same minute. I am also using the idea of the RET as a reason to exit. Unless a RET sets up to take a trade in the opposite direction, perhaps there is no reason to exit the trade just becaue a swing low is breached.
Anyway... that's it.
Attachments
To be honest though, I just don't think I will be able to trade live the same way I could in SIM.
I could have an amazing 4 weeks in SIM...when I decide to go live after 4 weeks...the very first few trades might actually be during less than favorable market conditions.
I want to take the trades that look good, and then I get out because I know I haven't tested enough given the recent aha moments....I just know that today for example I'd be mad for not making at least $500 if I was in SIM because it would have looked easy in SIM and I'd think I just cost myself $500. At least being logged into my live account...I can see that I couldn't actually make that money since I got out too quick.
So I very much might be going about this backwards...I feel as if I have to go down this road... I just have to hit rock bottom
Truly people will tell you who they are and what they want.
You need to fail. You are compelled to repeat it.
Work on this first or you'll sabotage yourself in trading and in life.
What is the difference between a "responsible gambler" and a "problem gambler"?
The former risks what he is willing and able to lose as an entertainment expense.
The latter is delusional and believes he will make money from gambling.
The delusion is the problem, and this leads to unwise decisions like gambling beyond ones means.
You have fallen for a fraud. In the end, nobody fools you - you fool yourself. Taleb wrote If you see fraud and don’t shout fraud, you are a fraud.
I think a radical approach is needed for you. Have you investigated Christianity?
The sincere believers I know seem to be moderate and content. There is so much unhappiness and anxiety in the world today. And it is for the individual to find whichever way he pleases to rise above it. Or sink to misery and despair. The choice as ever is yours.
And I'm obliged to post this to preempt the cynical accusations of "you can't do it so you think nobody else can" from the hopers and dreamers. Again, a few small trades, but with short holding times. Around 20 mins today. They add up. 6-9 ticks on profitable trades is perfectly fine. My profit per round trip is a lot less because I have to pay for losing trades. Did you know a good to excellent manual trader will make between 0.5 and 3 ticks per round trip (depending strategy and product)? Out of which one must pay fees and expenses? You are truly lost...but of course you already know this.
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You fail to consider that its not gambling if you have an edge. Is the casino gambling? Do they care if one person wins the jackpot? They know out of every $100 dollars gambled, they will get about $6 if I recall. I already posted backtested results which showed a 66% win rate over 80 traders or so that setup from the 130+ charts. Now granted this isn't good enough yet and I'm exploring context to keep me out of bad places to trade and context where holding is required for the bigger gains, but even those winnings were better than the 0.5 to 3 ticks you claim. Perhaps you're even front running with some privileged market access... how the heck do you gain half a tick? Clearly your method of trading is over my head, but since you're not going into details, its just as good as a cure-all medicine from 100 years ago that will heal my headaches and cancer and pain and fever and make me 20 years younger!
I was thinking of you when I took my two shorts on Monday. I wanted you to go long when I went short both times. Look at my chart... would you have gone long? You want to take the opposite of my trades so there were two great setups for you!
The fraud I see is you coming in here without anything tangible. You messing around here with 2 to 3 points is honestly not that great of a result when you see the monster drop we had on Monday. Hey.. if you're happy with your trading that's fine, and 2 to 3 points on many contracts is still a great amount of money. But why are you holding out for so little? Its sounds like you have a scalping system that takes advantage of T&S or something similar, I don't even know what to be honest. But if you truly are scalping for so little points, which almost doesn't even seem right since your holding time is far too long for scalping, why are you so closed minded that there isn't another method that works. Tell me why you assume that trading price cannot work... you still haven't laid out any proof to back up your claim.
Seriously dude, you gotta come up with something better than your continued argument that I will fail just because. At first I was curious in that you might have something useful to share, but you're saying the same thing over and over again so you're wasting both your time and mine. Your tangent about unhappiness and anxiety in the world makes me think you're gonna sign me up to some religion that I have no interest in... so if this is the case... there is the P & Religion forum just for you!
If I am correct, your times are EST.. correct?... here is your first trade. Green up arrow, your long, black down arrow, your exit. Price went much lower after your entry... not scared to get out? Price ended up going much higher after your exit... why didn't you hold for another 20 minutes? Your profit is much bigger than your risk! I thought that perhaps you had some system where you could see the orders and could see the buying coming in, but jesus, you had to sit during a pretty bad downturn, where was the buying after you got in to push price up? So you tell me why your system is superior to what I'm using!
I was thinking of you when I took my two shorts on Monday. I wanted you to go long when I went short both times. Look at my chart... would you have gone long? You want to take the opposite of my trades so there were two great setups for you!
The fraud I see is you coming in here without anything tangible. You messing around here with 2 to 3 points is honestly not that great of a result when you see the monster drop we had on Monday. Hey.. if you're happy with your trading that's fine, and 2 to 3 points on many contracts is still a great amount of money. But why are you holding out for so little? Its sounds like you have a scalping system that takes advantage of T&S or something similar, I don't even know what to be honest. But if you truly are scalping for so little points, which almost doesn't even seem right since your holding time is far too long for scalping, why are you so closed minded that there isn't another method that works. Tell me why you assume that trading price cannot work... you still haven't laid out any proof to back up your claim.
Seriously dude, you gotta come up with something better than your continued argument that I will fail just because. At first I was curious in that you might have something useful to share, but you're saying the same thing over and over again so you're wasting both your time and mine. Your tangent about unhappiness and anxiety in the world makes me think you're gonna sign me up to some religion that I have no interest in... so if this is the case... there is the P & Religion forum just for you!
If I am correct, your times are EST.. correct?... here is your first trade. Green up arrow, your long, black down arrow, your exit. Price went much lower after your entry... not scared to get out? Price ended up going much higher after your exit... why didn't you hold for another 20 minutes? Your profit is much bigger than your risk! I thought that perhaps you had some system where you could see the orders and could see the buying coming in, but jesus, you had to sit during a pretty bad downturn, where was the buying after you got in to push price up? So you tell me why your system is superior to what I'm using!
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And just for fun.. your next two trades. Jesus dude... I'm not saying I'm doing much better... but you're scalping with not amazing results and getting out just before a much bigger move is starting. Don't you see the amount of buying just about to enter the market just before you leave??? You seem to sound like you have a window into the markets that allows you to see what is about to happen... is it failing you today???
