Trading NQ via Price Action

[k p]

You should abandon your fantasies of successful trading. You have neither the intelligence or the temperament.

Those egging you on are doing so for their own selfish reasons and care not a jot for you as a person. They need the attention and you are fungible to them. Any starry eyed newbie will do.

You shouldn't place any value on their encouragement when they have no skin in the game. Go and find something you can excel at instead.

No need to take this personally - there are only so many people who are 7 feet tall and only so many people who can be successful traders. You will experience freedom in letting it go.

Ouch. What if the "freedom of letting it go" is followed by the "pain of giving up"? I'm not exactly pissing away life savings here you know. Plus doesn't the market need someone like me to provide profits for everyone else?

Listen, I respect your opinion and your right to say it, nothing wrong with that. But I firmly believe ND and Db along with some of the other traders who contribute are consistent in their profitability. You are absolutely right that at this very moment, my temperament is lacking, but what about all those inspirational sayings such as "its always darkest before the dawn", and... oh.. let me just attach some for you! I do believe this can be learned but for now I'm not doing the work necessary to work past my fears.

 

[Aj2014]

Do you think being a consistently profitable retail trader is impossible, Ghostofblotto?

 

[bh_prop]

You are back to trading real $$ sans a written plan. You haven't done THE WORK that db said you MUST do to be successful so all that rah rah crap you posted above is completely pointless. Losers don't do the work. Period.

Sure, it all looks easy in hindsight, always will. But that last trade you did is the perfect example of everything you are doing wrong. You took a short off a double top. Logical target would have been the last swing low T, I assume your initial stop was above S at that was your only reference point for a recent potential swing high. Price then stayed below S and eventually caved to test T. But you got out for 2 tick profit because why? Because price didn't dive in a straight line down to T? It rarely if ever will. Once in a trade your analytical skills go out the window and you manage with emotions afraid to let those few precious ticks of profit get away from you. Trust, me, it won't work doing that and you have the consistent weekly losses to prove it. My bet: overall you would be better off if you got into a trade put in a stop loss and a profit target then turned off your monitor and walked around the block for 20 minutes.

This all goes back to you not having confidence because you don't have a plan and quite simply you are a complete fool to think its going to come together without you doing the work FIRST.

I may have been harsh although not as harsh at blotto, but in fairness he does have a point.

 

[k p]

I may have been harsh although not as harsh at blotto, but in fairness he does have a point.

You're right on all counts. I guess its just that in these past couple of weeks, so many great ideas have come my way with ND's help. It was my intention to focus only only the 5 min/1 min setups. But then of course I fell of the tracks because I see other things I wanted to try. Of course trying is only for backtesting. Having tested this setup, I was going to go through with trading live. My first trade today was in fact this setup, albeit before the open.

After we opened, the huge price swings threw me a little, and I got completely off track. You're completely right that I would be better off putting the trade on and walking away. Once the trade is on, I feel as if I am "managing it" by continuing to watch price, but this clearly isn't working for me.

I don't mind the harshness at all because you are correct with everything you say. I have an issue with Blotto saying this is impossible to do because I think he has an agenda against Trading by Price. If he hasn't explored it, fine, but whereas your comments are constructive and honest, his were somewhat nasty with some undertones that relate not to me but more than likely himself.

I fully understand that the only way to solve my fear is with a solid trading plan that is followed religiously.... and I have no good excuse for why this isn't in place yet.

 

[NoDoji]

So I'm a little frustrated with today because when I look back at it now, there are such obvious areas to take advantage of.

M - Range here, once again, drops out the bottom, and when it does, good for almost 5 points. Shorting in an uptrend could be dangerous.

N - Lower high... could take some shorts next time price comes up again for a scalp back down to the bottom line.

Sigh... it seems so easy now.

How many screen captures of setups, entries and stop/target placement have you captured at the hard right edge and studied so far? You're paralyzed by the feelings of uncertainty. There is certainty, but not for each trade, only for each series of N trades (N having been determined by your extensive testing of consecutive appearances of a setup). Therefore success depends on trading every valid setup. The stuff you see that's so obvious when you look back after the fact is just as obvious in real time once you learn to recognize and "feel" its validity. This can only be done by capturing the hard right edge and internalizing the look/feel of the setups and/or by practicing with market replay until recognition and reaction (calculating R:R and placing the order if warranted) become automatic.

2) Your lettered list skips right over the key trend reversal setup that occurs off the 10am low. In that area between M and N lies the key entry point for the new uptrend. The first signal is the initial high that prints at M on your chart. Instead of turning back down after the pullback from 10:06 - 10:08 price breaks upside and clears the previous range high from 9:42 - 9:53. This price action could be nothing but a head fake bull trap, and there's no serious long signal...yet. When price turns back up and breaks through the M high, you have a confirmed 1-2-3 reversal on the 5-min chart. When this happens, price has a strong tendency to pull back to the breakout level and turn off that level to continue the new trend (previous resistance becomes support). So you watch for a pullback to 3946.25 and once price gets thereabouts, trail your buy stop above the 1-min pull back bar. Same method of entry as the trend line breakout pullback, but because this was a 1-2-3 breakout, the pullback is to the horizontal previous resistance of the 1-2-3 peak. Previous R becomes S (and vice versa for short setups), as discussed yesterday.

 

[NoDoji]

Having tested this setup, I was going to go through with trading live.

After we opened, the huge price swings threw me a little, and I got completely off track. You're completely right that I would be better off putting the trade on and walking away. Once the trade is on, I feel as if I am "managing it" by continuing to watch price, but this clearly isn't working for me.

I have an issue with Blotto saying this is impossible to do because I think he has an agenda against Trading by Price. If he hasn't explored it, fine, but whereas your comments are constructive and honest, his were somewhat nasty with some undertones that relate not to me but more than likely himself.

I fully understand that the only way to solve my fear is with a solid trading plan that is followed religiously.... and I have no good excuse for why this isn't in place yet.

How many consecutive appearances of this setup did you evaluate during your test of it?

The huge price swings around the open were a signal to wait for the market to assert itself directionally. There was no trend though you could draw lines across the swings on the 5-min. The trend line BOPB short setup was signaled but never triggered. There was a valid long BOPB setup but unless you had 5 pt target, the profit evaporated off the double top. If the conditions are too choppy, wait for clarity before surfing.

Blotto is recognizing in you common barriers to profitable trading. Profitable trading comes in a package and requires user assembly. If you're missing any of the parts or parts are damaged, you need to get those parts before you can begin.

I personally think your greatest chance of success will come from mastering a single setup. I like BOPB because it offers multiple opportunities daily and it's easy to connect swing highs/lows or to draw a horizontal line across a 1-2-3 peak/valley, wait for the pullback to the breakout zone and trail a buy/sell stop. You don't have to track TICK, TRIN, opens, closes, VWAP, RSI, Bollingers, whatever...you simply watch for the signal, calculate the R:R at the close of the appropriate pullback bar and place the order if it fits your R:R criteria.

That said, if you've truly tested the setup you reference above and it's got positive expectancy, then master that one and ignore all the shoulda, coulda, wouldas that your brain feeds you after every strong price move.

Mastering a setup means recognizing it in real time, being able to calculate R:R and place an order without hesitation, and managing the trade according to the rules you applied during testing to determine net profitability over each series of N trades.

 

[k p]

As always ND... amazing read on the market! I am struggling with actually getting to put into action what I'm learning because of course, I need to do it over a series of trades. I certainly need to train myself in sim so that this is automatic. I have put together a chart of the amazing analysis you provide. What a great entry this would have been today!

 

[k p]

How many consecutive appearances of this setup did you evaluate during your test of it?

Sadly, only about a dozen, hence why when a new one presents, I'm still not super sure. No two will of course look alike, but after seeing enough, making the call that "close is close enough" can I'm sure be made. Today was just a matter of looking at other things sadly, not focusing on just one.

I too have noticed that so many things have to come together and all work perfectly which is why I kept saying in my journal that you have to always be at 95%. If just one part is working less than optimally, no way can you get to 95% overall.

Anyway, so yes, I need to just focus more on one thing. It really is the only way forward.

 

[toucan]

KP.... this is your weekly reminder to "write down a specific trading plan with a single setup that you have reviewed many times by looking at the hard right edge".....

reading your posts, you still don't have a single setup that you can look at the hard right edge of the chart and say.... that's my setup, now look for the entry trigger.... it takes a lot of homework to get there before any trading. I do see you using the 5min chart, but you then get lost analyzing the 1 min chart because you don't have a specific set of rules that identify the setup.... ND and others have given you several good trading plans as examples, so you should be able to use them as a guide for your own trading plan.

you still don't have a written set of rules for trade management that describes what you will do if the trade goes against you and if the trade is profitable.... if you had trade management rules, you wouldn't have as much trouble cutting losses and letting winners run. you could still have problems, but not as many.

1. review enough charts to decide on what setup you will try
2. write up all the rules
3. test in sim or by marking charts in real time
4. only if/when you are profitable in sim or by marking, should you trade with real money

no cheers today

toucan

 

[k p]

no cheers today

toucan

LOL... Oh god, lets hope I don't need this same reminder next week! Very much appreciated though.