Trading NQ via Price Action

[k p]

Got up early today since I wanted to watch the news release and was surprised to find such a huge drop overnight.

There was this great consolidation for an hour between 3780 about 3790. Now I saw this in 2 ways. First, that quick spike down on the left felt like it would need to be filled in. So this DL that you see drawn in manages to accomplish this quite well. There are a couple of RETs in there to go long, but you probably really want to wait until we cleared 3790, unless you got in at the very bottom of the range.

A - Here is a great opportunity for a long. Mind you, the DL is broken by this bar below, but if price comes back up to trigger an entry above this bar, we can of course fan the DL down to include this swing low.

Sure enough, the trade would fill, but runs into trouble right away.

B - By the time this bar above B forms, I am starting to see this in a different light. That little climb up to A could very well be a lower high, so putting a sell order below here makes sense as well. Now I take it that we need a bit more confirmation of a change in trend before going short, but I just wanted to point out how quickly things can change from thinking to go long and then change to short.

The secret really is that not all retracements are the same. This one broke through the PDL, but the bars after that spike up before A do look a bit as if they are running out of steam. Perhaps this is looking too deeply into something that isn't really there, but I guess as a trader, you gotta be really agile and able to quickly change your mind.

 

[k p]

Wow.... to think that already just the overnight action made this a 100 point day (3832 - 3732 shortly after the open).

O - At the open, over 8000 contracts traded and after a quick drop, it was also a quick rise.

A,B,C - Completes a 123 setup to go long, but if the entry was a "stealth" entry, meaning the long was entered before the rise up to C to confirm the 123 with the higher high, an exit could still be made without too much loss.

The action here is just one big trading range mind you, and although it first looked like a downslopping channel, this quicly broke.

D - Breaking out here, but no entry anywhere.

E - Lovely entry here on the 15 sec chart, which you can also see given how these bars overlap for a few points, but this is tricky. You know, the way I lost a good chunk of my money so far is because I would take there retracement entries, but I would take them before the bar finished forming, thinking why wait if I can get in now. This, along with the fact that my bars were drawn all wrong for months given the platform issues are two major reasons for my lack of success. But both of these are almost fixed! (the taking of random entries, or entries within the bars is slowly working itself out of my system)

F - First RET in here, works quite well, but gotta be quick to take profits as price comes crashing down.

G - Trying for another long entry here would work as well, but seeing as we are forming a range, I wouldn't let price go against me. Lots of room to get to the top of the previous high though.... this airspace as ND would say is a great reason to put this trade on. If we can't go higher, I still make money, and if it does go higher, I'm already in.

H - At first this looked like a lower high, but then of course price comes back up again offering even another RET to go long. This one really takes off. What a great SLA day. These bars are just so big though and stops in some cases have to be almost 10 points!

I - Here is the 5 min SL from overnight... wow.... do we really bounce off here to go lower? ND has her BOPB entry, and she once annotated a chart where she showed how she would take a bounce from a trend line in a well defined trading range/channel. This isn't exactly a channel as I'm using a long term 5 min SL, but the idea is the same I think. I wonder if she has any more slides for not a BOPB entry, but a BOTL entry (bounce off trend line)

J - Here is another RET to take an SLA long.

K - Looks like we are running out of steam here.

L - We break the DL drawn in on the 1 minute chart, but I'd also say we have a consolidation of between 70 and 84 that we need to clear first before taking either another long or a short. (To be fair, this DL couldn't be drawn in until we break above the highs which are above H. A steeper DL which could have been drawn earlier would have already broken, but I'm no longer a fan of steep trend lines that hug price too much)

M - Trying hard to break above, only by a tick or two. Now do we try for a short below the this bar? We could actually make 5 points on the way down to the bottom of the range, and since we tried to break above 3 times and can't, if we break below, we would already be in a short. I've seen this "topping" behavior so many times, and 3 tries at breaking through is giving buyers plenty of chances... its time to see what sellers can do!

N - Drats.... what a great trade... we break below. Ok... lets wait for a retrace back up and a test of the breakout level and see if we can get into that short somewhere.

P - Once again, great RET in the 15 sec chart, but nothing we can see on the 1 minute chart.

Q - Ok... we actually come back up to test the breakout level (we get to a high of just above 71, so we do penetrate the bottom of the range slightly which I outlined as 70.)

R - We can place a short below this bar.

S - Drats, we end up going higher. Well, this is one trade that didn't work out. With an entry of about 65 and an exit of 72 (these are big bars), this is a bit of a hit, but if all of the entires are taken as marked based on what price is doing and not being worried about the P&L, today would still be well into the green!

T - Just yesterday I read some of Db's old stuff, and in addition to channels having means, trading ranges have them as well. This rise up to T is certainly a test of this mean it seems. Lets try for a short below this bar. Now this does get complicated because not only am I looking out for testing the bottom of a range, or rather the breakout level, but now I am also looking at what happens at the mean of the range.

U - Yup.. this trade seems to work and we form a lower low after 5 minute of consolidation after our entry was triggered. As I type, just that trade alone is already worth 15 points.

SUMMARY

I'm quite pleased with today. Made no money, but it all makes sense.

V - Crap, I just noticed this, how in the new downtrend, if I draw in this DL along the lows, once it breaks, its a good reason to go short right away. Someone secret taught me that!

So here is once again my problem. My "trading plan" consists of thinking my way through. Its true that now at least I have a very firm grasp of what I want to see and where I want my exit to be, so this can at least be tested somewhat, but its still quite loose, too loose to put down onto paper. Sigh...

At any rate, I'm very happy with my analysis today. These bars were huge and the action was quite viscious. But lets not forget, this volatility is great for making money once you know what you're doing!

 

[k p]

W - Can't ignore this downslopping channel that formed as I was typing. The entry marked at W, in real time, before it was even hit, had price go against it 2 bars later, but it hadn't broken the highs of the setup bar.

I'm also not sure if the target should be the previous swing low around 54, or the bottom of the channel line as marked which is just a clone of the top line (it seems like it might not make it to the bottom of the channel since it didn't when it stopped at 54). Its not looking good with price only getting to the midpoint, but I guess you gotta give it time. But at the same time, an exit can always be make for a couple of points profit in case the trade didn't do what I thought it would in sufficient time. Lets really see what would happen, if it hits its target of 54, or a stop of about 68.

 

[k p]

It makes much more sense to draw the lower line like this as it connects with 2 points and looks more symmetrical. The result of the trade has also not been established yet.

EDIT: Bam! It actually hit 52, so the target of 54 would for sure have been filled.

 

[k p]

I actually now notice this triple bottom at 53. Those two previous swing lows at 53 did in fact provide support... look at the quick rise up!

 

[llIHeroic]

I’m going to post one time in your journal…, then never darken it again...

...You’ve had…, and have…, several good traders trying to assist you

Superficially you acknowledge them.., however truly you ignore what they share...

You've had several individuals try to get the point that RN is trying to make across to you, and from the looks of your reply to him it seems like it's gone over your head once again.

You obviously can't see it, but it appears that multiple outsiders have perceived the same impression from reading your thread and trying to interact with you, that you're off in your own little world and you're unwilling to leave it.

What concrete improvements in your trading expertise can you point to after having spawned over 80 pages of discussion in your journal? What are you gaining each day from lettering places on a chart and describing your own personal and subjective experience of what you saw at those times? Why aren't you asking questions like these of yourself periodically?

You're obviously meeting some kind of need by continuing with this journal, but unless you're able to clear your head and begin taking rational and objective steps to defining and improving upon a profitable methodology of trading, you're going to continue to spin your wheels and go nowhere. On top of that, you're actually doing live trading with no sense of structure at all and justifying away your losses when your irrationality is pointed out. You re-interpret people's communications to you and frequently shoot off an immediate reply without taking any time to stop and analyze what they are trying to convey to you, and actually consider their viewpoints.

This isn't an attack. This isn't an attempt to discourage you. This is a realistic assessment of the current reality of this journal from an unbiased, outside observer. If any of this makes you feel negative emotions, I would encourage you to think about what parts, and why. This is my last post here as well. I'm not looking for a response. I would much rather you just spend a few minutes thinking about what's been written to you this past week than composing an irrelevant response to me, unless you just simply can't help yourself.

Honestly, best of luck with your journey. I hope you find success in the areas that will better your life for it.

 

[k p]

I do thank you for sharing your views as I know everyone is trying to help, but what is the point of a second person saying "here is what I think" but don't care for a reply back to discuss it? It sounds to me like its a case of ego and just wanting to be heard so that when I supposedly blow up, everyone can "say" they tried to help me.

Perhaps I need to just clarify that at the moment, I am not putting on any trades. What I mark on my chart is somewhat sim trading, and I'm just tracking to see what happens. It would be better if I actually had a spreadsheet so I could compile some stats, but I wouldn't know how to categorize it all, hence my problem of forming a solid plan... its difficult to put what I'm seeing into words.

So just in case I'm too dumb, what point is RN trying to get across? The helpful posts in my journal have been showing me different ways to look at price action or perhaps what I'm missing with reading my chart. I have really appreciated ND's charts and also Alpha Trader's analysis. bh_prop and toucan have been helpful in making sure I stick to forming a trading plan.

I'm curious why what I did today has no sense of structure? I am following the trend with the trades I outline, I am seeing areas of resistance and trying to get into the opposite direction when price is unable to penetrate a level and setups up a trade in the opposite direction that has a clearly defined stop and profit target... so where is the part that is missing from my methodology?

I don't feel negative emotions, but I'm pissed that you're speaking without pointing to direct examples, just stating generalities. I asked RN to back up his claim that Db is just a guru, and although he might not reply, I think its important to back such a claim up with evidence.

So I ask you about the specifics of where I am currently going wrong. I maintain that my price action reading today is pretty damn good, but if you can point out flaws, I'd love to hear.

Before starting this journal in February, I had zero experience with trading. So many people have told me that its taken them years to become profitable. In this regard, I think I'm actually ahead of the curve. I've gotten my toes wet to see what doesn't work... I'm using a method that I can see works (by this I mean general price action), and I'm fully aware that I need to fix my psychology in order to make this work. So I think I'm doing pretty well... although my biggest issue is still the fear and this one doesn't seem easy to get around just yet.

I do thank-you for taking the time to post, but I am not seeing specifics in your post that tell me where I'm going wrong so that I can logically evaluate.

 

[toucan]

.... sorry that I forgot to remind you to write up your trading plan

 

[k p]

.... sorry that I forgot to remind you to write up your trading plan

(at least your advice is direct and easy to understand!)

 

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