Trading NQ via Price Action

[dbphoenix]

Switching to my charts to make it easier to draw what needs to be drawn.

Good old SLA would have us draw the initial tight DL on the way up. Ideally we would have a higher low to connect, but here, price never makes a higher high so we can't fan this super tight line. The first RET happens overnight, so can't do anything with this, but the second op for a short at the second red allows for a solid trade on this hourly chart given that we are rejecting going higher and formed the double top at B with A.

Forget about SLA and DLs and fanning and retracements and shorting and the bar interval. This is only about trending and ranging.

What clues if any do traders provide to tell you that they're going to take this down? Simple language. No jargon. As if you were explaining it to a child.

 

[k p]

In this case, they had all that time to take it higher and couldn't... so whatever goes up, must come down. We see how quickly it went up and expect it to continue, but when it doesn't, now me might start to think it will go the other way and hence down.

 

[dartmus]

Forget about SLA and DLs and fanning and retracements and shorting and the bar interval. This is only about trending and ranging.

What clues if any do traders provide to tell you that they're going to take this down? Simple language. No jargon. As if you were explaining it to a child.

Traders were happy with their profits from the uptrend. As they began to sell price gradually drifted down. When the day session opened they tried to go up but found that other traders felt it had already gone up enough and no matter how hard they tried they couldn't get it to go up any further. They tried to go down and found this was the path of least resistance.

fwiw, approximately 60 points up followed by 60 points down.

 

[samuel11]

I think similarly than this kp. After the first move to 4,280, we stayed there for a dozen bars. The second time, sellers did not even allow more than a few bars. Just look at the breath of the market. In real time, see how fast inside the same bar price goes up or down... It helps to see who is in control

 

[dbphoenix]

In this case, they had all that time to take it higher and couldn't... so whatever goes up, must come down. We see how quickly it went up and expect it to continue, but when it doesn't, now me might start to think it will go the other way and hence down.

There is a third choice: sideways. Which price has been known to do. Sometimes for days.

As to the inability to take it higher, where does that take place?

 

[k p]

There is a third choice: sideways. Which price has been known to do. Sometimes for days.

As to the inability to take it higher, where does that take place?

That bar where it goes up, we simply don't know at the time if it can go higher or not. Within that bar we would see price coming down, but its only when that hourly bar "closes" that we see price exit slightly lower than the price where it actually entered. Now we could say that they might try again, but we also notice that on this bar, the bar at B, price also broke lower below the previous lows. So we couldn't go higher, but we tried to go lower, and ended up in the middle of the bar but close to the bottom of that range. Its only on the next bar that we see price try lower again, but not try any higher. Then we have another bar that stays at the bottom of the range, but still doesn't break lower just yet, not below that previous low at least.

 

[eminiman414]

Yea take a break and retest of the broken level. Those attempts don't go very far and we consolidate for another hour and change then we do the same play again waiting for that new low of the consolidation to break and be retested. This was actually an interesting day.

 

[eminiman414]

On a faster interval that is

 

[dartmus]

There is a third choice: sideways. Which price has been known to do. Sometimes for days.

As to the inability to take it higher, where does that take place?

It stops going higher, stalls or pauses in the vicinity of yesterdays HOD. It is unable to correct sideways or even to flag normally down. Instead it spikes down below the open where it is comfortable going sideways. I'm looking at the five minute chart, just so you know.

 

[dartmus]

Yea take a break and retest of the broken level. Those attempts don't go very far and we consolidate for another hour and change then we do the same play again waiting for that new low of the consolidation to break and be retested. This was actually an interesting day.

If I am reading this correctly then on my five minute chart there are actually two retests of the breakout below the consolidation? Is that the area you're describing? How should I handle that second retest at 1055 cst being higher than the 1st test at 1005?