Trading NQ via Price Action
- Thread starter k p
- Start date
I will read your PDF again Db and look into section 7. I would ask you what I am looking for, but just scanning the file again does say to not rush to make any conclusions. I would then ask how long I should be just watching price for, but then there is also a section that specifically states "how long does it take?" So I better not ask any more questions! 
K, from personal experience I can tell you that all the training wheels are just going to hold you back after a while, use them learn what they teach and dump them. Dont think in how long will it take, because that will make you anxious and force things that you cant force.
Just watch price, make notes, and study the basics. The aha moments will come, if you try to trade it it will take much longer.
Just watch price, make notes, and study the basics. The aha moments will come, if you try to trade it it will take much longer.
Thanks Niko. Yes, I do believe everything you say. I guess I just feel a little flustered at the moment. So many parts need to come together and I'm not even sure what all of those parts are. I'm looking for something, but I don't even know what I'm looking for! Watching in real time its amazing of the things you can convince yourself of. I completely understand how the desire to call a bottom for example ends up being just a retracement in a further down move, and hence calling tops and bottom is next to impossible.
I guess I was hoping that I could start with some dead easy setups, trade those to get my feet wet while I learn more and make a couple of bucks. I do believe that the SLA method would work beautifully if you took every setup. Even though you might be stopped out for a 2 point loss several times in a row, it seems like you'd still be ahead when you get that 20 or 30 point move. But of course since I haven't thoroughly tested any of it, as Db points out, my hesitation is directly inversely proportional to confidence in the method (or something to this effect).
I read the summaries in the other journals, and sure, at the end of the day its easy to say price is moving up, sees resistance, goes sideways, drops because of lack of buyers, etc. But in real time, this analysis would sound nothing like this! So I'm a little frustrated, but just a little.
I absolutely trust the process though and wont stop until it I succeed. The combo of the chat and the journals is thankfully pointing me in the right direction. I guess maybe I just think that sometimes I can look at it from so many different ways and just want to know what is the right way. What should I actually be thinking when I see price move in a certain way? Is a drop in price a pause or a sign of trouble? I always wonder if I have seen a series of moves down, can I still get in on a retracement or has it gone down too far?
Anyway, just rambling at this point. Thanks for reading!
I guess I was hoping that I could start with some dead easy setups, trade those to get my feet wet while I learn more and make a couple of bucks. I do believe that the SLA method would work beautifully if you took every setup. Even though you might be stopped out for a 2 point loss several times in a row, it seems like you'd still be ahead when you get that 20 or 30 point move. But of course since I haven't thoroughly tested any of it, as Db points out, my hesitation is directly inversely proportional to confidence in the method (or something to this effect).
I read the summaries in the other journals, and sure, at the end of the day its easy to say price is moving up, sees resistance, goes sideways, drops because of lack of buyers, etc. But in real time, this analysis would sound nothing like this! So I'm a little frustrated, but just a little.
I absolutely trust the process though and wont stop until it I succeed. The combo of the chat and the journals is thankfully pointing me in the right direction. I guess maybe I just think that sometimes I can look at it from so many different ways and just want to know what is the right way. What should I actually be thinking when I see price move in a certain way? Is a drop in price a pause or a sign of trouble? I always wonder if I have seen a series of moves down, can I still get in on a retracement or has it gone down too far?
Anyway, just rambling at this point. Thanks for reading!
You nailed it; you're looking for certainty, and the fact that price has moved a "long way" in a certain direction convinces us that it's "due" to reverse. And so we think that little higher low or lower high is THE REVERSAL.
BUT...as long as there's a key level a tradable distance away, I've learned to just keep on trading the retracements in a trend.
The three charts I posted at the start of the thread below illustrates the trend continuation setups that can look and feel like reversals, but as long as a key level is still above or below, it's worth considering them as continuation setups until that level is reached.
http://www.elitetrader.com/vb/showthread.php?t=281746
I consider a key level to be a longer term trend line, a "previous S becomes R" or "R becomes S" horizontal line, a previous day's close/high/low, a longer term trend line or moving average...pretty much any level that lots of eyes are watching.
Even those levels get breached, but until price reaches them, I consider them profit target magnets for with-trend continuation trades.
Hi NoDoji... nice to see you pop into my thread!
I'm happy to say that I understand perfectly well the points you are trying to make, and these are things I'm looking for as well. It seems like I am looking at too many things are once from the get go. Because I have read quite a bit of Al Brooks and now Db, my head is filled with so much stuff that I don't even know what I should be looking at anymore until I can piece it all together.
I do remember you also saying that your most profitable trades are where you are buying at the top. I think of this each time I look up the price of Tesla!
You nailed it when you said the level that lots of eyes are watching. I know that since it takes traders to move price, if lots of traders are watching particular levels then things happen at these levels.
I just know it will come together for me, but I am a bit impatient. On the one hand I want to start taking trades so that I see for myself that this SLA method will make money, but I also want to make sure to do it right because I don't want to have to start over again as Db warns. Having found this community though I am definitely closer to finding my way than to being lost!
So I wan't able to be in chat today, but I made sure to leave it open so I could review it.
I am very happy I did. I found some nuggets of gold that answer perfectly what I have been posting as my struggles these past few days. I hope its ok that I post a snippet from the chat where Db explains how he uses and doesn't use the channels.
------------------------
Db-The short should have been taken Tuesday afternoon.
Db-But whether or not it was taken, the first "target" is still the mean of the TC
Db-Which is 3600
Db-All this is posted to the Ghost thread.
Niko-So in the end one is essentially trading a larger timeframe (days) using the 60 min interval to define strategy and the 1 min to execute tactical entries.
Db-If that's what one wants to do. Again, this is all posted in the Ghost thread.
boru-yesterday the channels in the 60 lined up so well today I can't see anything better to wait for clarity?
Niko-Yes, just that the Aha moments take time on me
Db-The mean of the TC is 3600. Since the market isn't fractal, it doesn't make any difference what bar interval one uses.
Db-Why are you using channels at this level?
boru-me?
Db-y
boru-just trying to map the PA
Db-Channels are not appropriate
boru-to be honest I am struggling trying to reconcile both the SLA and TC's
Db-I use daily and hourly channels to get the setup for the coming session, but I rarely if ever use them intraday.
Db-Then don't try.
Db-TCs are irrelevant intraday
boru-ok
Db-The fewer lines one has on his chart, the better. Preferably none.
boru-finding that to be true
Db-The lines are simply an aid to focus. You can't corral price anymore than you can herd cats
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Information overload is definitely something that I am probably suffering from at the moment. Since I don't know how to put it all together just yet, its only getting in the way.
I can't watch price live tomorrow again, but over the weekend, I will pick random days and play back in real time the first 2 hours of several days just to watch price move. The good thing about this is that since it might be from weeks or a month or two ago, I won't have any bias, I won't know where we are in terms of position within the channel, so I will be forced to just watch price move. And then next week I will be ready to start making a fortune!
(kidding!!)
I am very happy I did. I found some nuggets of gold that answer perfectly what I have been posting as my struggles these past few days. I hope its ok that I post a snippet from the chat where Db explains how he uses and doesn't use the channels.
------------------------
Db-The short should have been taken Tuesday afternoon.
Db-But whether or not it was taken, the first "target" is still the mean of the TC
Db-Which is 3600
Db-All this is posted to the Ghost thread.
Niko-So in the end one is essentially trading a larger timeframe (days) using the 60 min interval to define strategy and the 1 min to execute tactical entries.
Db-If that's what one wants to do. Again, this is all posted in the Ghost thread.
boru-yesterday the channels in the 60 lined up so well today I can't see anything better to wait for clarity?
Niko-Yes, just that the Aha moments take time on me
Db-The mean of the TC is 3600. Since the market isn't fractal, it doesn't make any difference what bar interval one uses.
Db-Why are you using channels at this level?
boru-me?
Db-y
boru-just trying to map the PA
Db-Channels are not appropriate
boru-to be honest I am struggling trying to reconcile both the SLA and TC's
Db-I use daily and hourly channels to get the setup for the coming session, but I rarely if ever use them intraday.
Db-Then don't try.
Db-TCs are irrelevant intraday
boru-ok
Db-The fewer lines one has on his chart, the better. Preferably none.
boru-finding that to be true
Db-The lines are simply an aid to focus. You can't corral price anymore than you can herd cats
------------------------------
Information overload is definitely something that I am probably suffering from at the moment. Since I don't know how to put it all together just yet, its only getting in the way.
I can't watch price live tomorrow again, but over the weekend, I will pick random days and play back in real time the first 2 hours of several days just to watch price move. The good thing about this is that since it might be from weeks or a month or two ago, I won't have any bias, I won't know where we are in terms of position within the channel, so I will be forced to just watch price move. And then next week I will be ready to start making a fortune!
(kidding!!)But you're creating the overload.
1. Track the balances between supply and demand with straight lines.
2. When price takes off in one direction or the other, wait for a retracement.
3. Enter on that retracement, a few ticks above the trough of a \/ retracement or a few ticks below the crest of a /\ retracement, and stay in until your line is broken.
4.When the line is broken, exit and wait for a retracement in the opposite direction.
5. Continue until you enter chop (two consecutive trades that don't go anywhere and are accompanied by a higher low and a lower high, i.e., not trending).
And that's it. If a trader brings a lot of baggage with him, this gets real complicated real fast. But that's the trader's choice, not a characteristic of the approach.
Thanks Db. Yes... I absolutely am creating it and I will try and focus on exactly what you said, which is essentially the SLA.