Trading NQ via Price Action

[k p]

Why would a “trader”…, be reluctant to show the very thing they produce – especially if that “trader” is espousing the way it should be done

On two occasions I’ve posted my daily PnL and asked he do the same – no response

Second

He has said (and stood by) 3 things that are absolutely impossible for day trading…, but if one doesn’t actually trade – all 3 sound plausible – they are not

Third

He has told me things don’t work – that I use every day

Fourth

You’ve heard me speak many times about losers – why – because I have them

Fifth

Why talk down to those you’re supposedly helping

I’ll chew your ass in a heartbeat.., but I would never talk down / disparage anyone trying to learn this – it's hard.., its frustrating

I respect that.., and those trying

Sixth

Why sell a book – give the thing away – I can assure you a trader can make that…, and many times more – in a week.., if not a day

eta - there are more - but this will suffice for now

================================

Like I said – we could go off on many tangents

The sole purpose/ goal here – is for you to become a trader


Period


==========================

Oh..., one final note KP

When I first started trading - I was scared shitless... my palms sweaty..., my heart beating out of my chest

We've all gone through it - please know..., it does subside with time


RN

Thanks for this RN. I of course cannot answer for Db, but perhaps I can shed some light on some points for why, at least for me, these are a non issue.

1. It may very well be that his P&L is pitiful. Maybe he doesn't even trade. But given that he posts his method, do you think it seems logical that based on this, he can attain consistent profitability? I've already backed up why the method is more important than the result, so no need to get into it again. I will grant you that we have absolutely no proof that he trades, but if we separate the method from the person, its probably more important to evaluate the method than to know what he does with it.

2. I'd love to know what these 3 things are. I agree that just using SLA by day trading the 1 minute bar chart is extremely difficult. I know I couldn't do it. At the same time, I hadn't identified what I would consider to be an exit for me, and I didn't see the importance of previous swing points to help you gauge if you should stay in a trade or not. To be fair, his PDF does use hourly charts, and he himself says he doesn't day trade, but since most people wanted to use 1 minute bars, this is what he used as well.

So perhaps blindly just drawing lines by connecting points and entering trades is a bit too simple, but then again, there is a rule to stop trading after 2 scratches, and as long as you take every trade after this, over the long run, you're more than likely still positive in a week. Can a new trader take trade after trade as he should after a few loses? I don't think so. But I do think that with a bit of practice, you learn how tight or how loose to draw your lines, and he does encourage you to lose them as quickly as possible. The essence of the system is trend following, so this isn't too abstract.

3. Once again, since you don't provide examples, there is no way to evaluate. He would of course always say that as long as its a tested methodology that produces a statistically positive edge then why the hell not, but I'm sure there is more to this.

4. Yup... losses are part of the business.

5. I know that Db is a little rough around the edges. I think that his expectations are that people would act rationally and in accordance with what is in their best interests. But us humans are anything but! I think he just has no patience for people not doing the logical thing. I'm not sure if I ever saw him write something mean, but I can certainly understand why some of his responses would seem cold or disinterested or impatient.

6. The book this is really old. Its from so long ago, and what he currently provides is the free PDF. I'm sure the fee for the book in no way helps his bottom line, but if a person is interested, why not charge just a bit? People value something that they had to pay for more than if its given to them freely.

So yes, its all about the trading. I can see that you have some good reservations about his trading method, which is fine, but I think if we just focused on this, separating the person from the trading, there might be less grievances.

Its funny how the fear is such a huge factor. But of course when you truly know you have an edge, when you accept the chance of losing or gaining and know that in the long run your method puts you on the correct side, then there is really nothing to fear. I wonder what this will feel like... which is quite an oxymoron to say that I'm can't wait for the feeling until I feel nothing when in a trade! LOL

 

[Redneck]

You wish to discuss / defend db... or focus on becoming a trader


RN

 

[k p]

You wish to discuss / defend db... or focus on becoming a trader


RN

Oh for sure trading... I just wanted to reply since you took the time to post!

 

[Redneck]

Please get to owning the set up NOD shared / creating your plan


RN

 

[NoDoji]

You know its funny because when I lost the bulk of my money, my brain would think here is a good place to put on a trade. Then I would watch to see what happened, and after it worked, then my emotion wanted to get in on it cause I felt like I was missing out and wanted to be rewarded with my keen insight. Of course the proper place to put the trade on was gone, so when I entered, it was far too late. But I feel that if I in fact act at the same time that I think, without waiting to see what happens, perhaps this will lead to consistent profits.

If you act by placing an order at the price indicated by your qualified setup, and your order is filled/triggered, you'll get in at or close to the price you're supposed to get in at to preserve your R:R ratio.

If you then manage the trade according to your trade management plan, and if you trade all appearances of your setups appropriately, you'll probably get results similar to your test results.

It's the process of acting appropriately at the same time you see actionable price behavior that is more likely to lead to consistent profits.

Learning not to chase price when a proper entry was missed is the first step to reducing risk. However, part of your plan should include what to do if you hesitate (or step away) and miss a trade. Do you quit for the day because your edge is now skewed? If you get very few appearances of your chosen setup during a given day, that might be an appropriate choice.

 

[k p]

Learning not to chase price when a proper entry was missed is the first step to reducing risk. However, part of your plan should include what to do if you hesitate (or step away) and miss a trade. Do you quit for the day because your edge is now skewed? If you get very few appearances of your chosen setup during a given day, that might be an appropriate choice.

Absolutely! Learning what to do is one thing, but then training the brain to act decisively at the right moment is a whole other issue. KDA on here mentioned to me the power of simulating with reference to how astronauts attribute being able to do what they needed to when it mattered to having simulated it countless number of times.

Its kind of funny when you think about the fact that the answer is right on a chart. Every question about how price behaves can be answered by just looking for what it is you're looking for. And yet, most people just fail miserably at this. (not excluding myself here). So often after I put on one of those chasing trades that then cost me money, I could clearly say where the entry should have been if I didn't hesitate, and then I can clearly see how much time I would have had to exit, even for a profit! Rarely do those bars that are 20 points long appear (like today), that allow you to enter far into the breakout move and still be well into the money in seconds. It usually takes me at least 10 points to acknowledge that this breakout looks solid, and by then, as you say, the R:R is so badly skewed that over a series of trades, chasing price is the worst thing to do. (I think you have to do this badly a few times though until you train the brain that this really is stupid!)

That huge move today though ND, that huge bar from a price of 3710 to 3730, and then the next bar from 3730 to 3748... what the heck was that? Its a 38 point move in only 2 minutes. There was no news release, so do you think it could have been some trading firms that decided to buy a huge chunk all at once? A move like this happens only after a major news release. Up to this point the trend was very clearly down, so why all the buy orders? (unless of course, as I point out, it really was the bounce at the 5 min DL which happens at S on my chart, but would this one thing entice so many people to buy?)

 

[NoDoji]

That huge move today though ND, that huge bar from a price of 3710 to 3730, and then the next bar from 3730 to 3748... what the heck was that? Its a 38 point move in only 2 minutes. There was no news release, so do you think it could have been some trading firms that decided to buy a huge chunk all at once? A move like this happens only after a major news release. Up to this point the trend was very clearly down, so why all the buy orders? (unless of course, as I point out, it really was the bounce at the 5 min DL which happens at S on my chart, but would this one thing entice so many people to buy?)

Price pulled back to the DL (S) after a strong upside breakout earlier. The next few bars took price up to the previous support level (around Q). Look at the 3rd bar after S (the pullback to around the Q level). If the low of that bar breaks, chances are good price will break through the DL and sell programs will kick in for a measured move down. But if instead price breaks through the high of those bars, price is likely to run up to the distant upper channel (connect the high at E to the high just before J). That's a lot of airspace above and my guess is that a lot of buy programs kicked in and were willing to keep on buying until that upper level was reached. Why it happened so fast I don't know.

 

[k p]

Beautiful... just beautiful. As always, my chart is updated with your very insightful comments. (I make these charts both for review, but also because the act of doing it I think makes it stick so much better. Its almost like muscle memory, but here I'm using my brain to tell my hands what to draw in, making my eyes see it, so that one day it all just becomes automatic).

I'm not sure why it is that your explanations just make so much sense. On the one hand you're giving me the possible "why", which although doesn't matter when it comes to price, we just have to see what its doing after all, but by filling this in for me, its one thing my brain doesn't have to think about and hence can just focus on the "what". I think this is really key. I might sit there for a few seconds and wonder why are people buying in a place like this, but just to know that some algo got trigger based on the support levels that you make so clear, this allows me to now focus more on the "what" that is happening, which now makes it so much easier and quicker to act on.

Often you talk about levels of support and resistance and I am always curious how you arrive at these levels (where price turns is of course once answer, but this doesn't seem complete enough for all cases), so with you pointing this out in your posts here and there, it truly is a huge help. It not even just pointing out the level, the missing ingredient has always been what to do about it, which once again you illustrate so well when you discuss the break of a high or low of a bar.

Now to all the people commenting, before you get all bent out of shape because I am following ND so religiously, what I need to point out is that ND has been instrumental in helping me see. Of course I have to do things my way, but just as ND said not long ago, she didn't need to spend a year reinventing the wheel, so likewise, I'm making sure to really let everything sink in that she says. She is helping me see, and once I can see this for myself, it truly will be a part of me as well, it will be my plan. So although I may appear as if I'm just copying Db and ND, what I'm really after is developing my own eyes and instincts and am just being guided in the right direction. If I was a boxer, Db and ND would be the coach, but I am of course the one who is still throwing the punches.

AND MOST IMPORTANTLY...

I really do want to thank you ND for your posts, especially in these last couple of days. Lots of people have been coming down on me quite hard, and although they have good intentions, none of their posts are nearly as beneficial as yours.

You have just stuck to business of trading. You haven't tried to discourage me, and that book recommendation weeks ago was spot on perfect timing. When others pointed to huge abstract deficiencies in my way of thinking or my way of journaling, you have actually provided something concrete and useful. Instead of having to take 3 steps back and think in some metaphysical terms about the meaning of my relationship with the market (not that I even know if what this makes sense), you have just focused on helping me read price, on showing me how to hunt down a possible trade.

You really are one classy lady, and in the midst of all this testosterone, it is nice to have a caring, honest and beneficial push in right direction.... the way that only a mother can! (I assume you're a mother... but even if not... the womanly touch here from a classy lady is just such a nice change)

So thank you.

 

[k p]

A - So coming into the open, I have a very shallow SL, and the OH right here as well.

B - I've got this DL here, connecting with the lows overnight. Here I drew in a hinge as well, so lets just see what happens.

C - This is a pretty firm level of support here with price having bounced off this level 3 times over night.

D - There is a break out the hinge.

E - But also a quick trip down. This sure migh be a test of the apex of the hinge, and price also bounces off this 5 min DL. Buying above this bar seems logical, but I don't plot it in.

O - So at the open, we have broken that very shallow SL, but the close is below the line. The next bar likewise opens below the trendline, and then shoots straight up with not a RET is sight.

F - Just as quickly it goes up, it comes crashing back down.

G - Below here, price goes through the DL, but it comes back up before dropping again. The RET/test isn't all that neat.

These bars, although they have a direction, just overlap so much.

H - When we come to the level of support, there is some consolidation just above this area, but when we break through, its a solid break. That green line below is the PDL.

I - Just as quickly as we came down above, here we bounce off and go straight up. Reversals usually don't take the form a "V", but here its difficult to see any RET so its sure looks like a V reversal.

J - There is some consolidation here, but nothing that qualifies as a 123 setup to go long, especially after such a strong down move.

K - Here is a slight poke below.... perhaps a higher low? Way too tiny in relation to a typical RET.

L - This might be the first solid RET, but its still that funny type where its just a consolidation area stacked on top of another consolidation area.

M - Here I finally mark in a possible long, but truthfully, I don't think I'd have the confidence to actually take it. That REJ at F was very strong, so if we are going to go up from here, we are entering the level where we had no buyers after the open to support price. At least right here, this RET is a few points deep so if I'm getting in around 3803.50, there are a few points of airspace to the previous high just minutes earlier. It turns out this trade would work, but once again, its easy to mark it in when I don't care one bit how it turns out.

N - I've got my wedge pattern drawn in here, and although we break up, we come back down again.

By now we have of course already gone up 30 points, but how this happened, I have no idea.

After this, its still a series of higher highs and higher lows, and although the trend seems to break here with this lower high, none of this today is all that clear.

I am also attaching a 5 min chart. I outline a target that I thought we could shoot for. Once we hit the low of 3781 after the open, I thought if I connect "a" and "b", and clone this line to connect with the top of "c", then extending this line could provide a target. It may very well still, but I certainly didn't see any good way to enter a long after the bounce from 3781, and we might not even make it to the top of this line either. (as I'm about to post... we have made a higher high above "d")

 

[k p]

Wow... well... it made it.

You know.. price went up 60 points just overnight... and then even though there was a severe dip down after the open, it went up 50 points after the dip to 3781, and somehow... I missed it all! Talk about missing the forest for the trees!