Trading NQ via Price Action

[k p]

Well I'm trying hard to do my stats, but I'm failing miserably. I'm just not sure what to make of all of these things. Today was a horrible day with so much chop that I had my 5 min trendlines but then I wondered if I should start fanning them of not. Monday and Tuesday were huge trending days, and unless one got into a the long right away and just held all day, then getting into a long again might be tricky.

I am trying to make sure to only draw trendlines that are obvious on a 5 minute chart, and then load up the 1 minute chart and see what's happening, but it seems like I have too many cases where I'm just not sure how to categorize what I'm seeing, and if I use context, I still wouldn't want to take some of these trades even though the break might set it up. Plus of course, I am using some 5 min trendlines that are too shallow and perhaps might not be valid. I can draw fairly consistent trendlines going into the open, but after the day starts, I tend to want to do very creative things with them and this is not good for developing a solid plan.

Anyway, I have no stats, but I've got nice visuals. I'm having trouble making sense of all of this if I'm forced to do it within the confines of a very rigid structure. I also have the benefit of knowing what happens in these charts, which is detrimental to this exercise so I'm fully aware of this.

 

[Redneck]

So I know you trade FB, and this wouldn't be nearly as useful to me as if you showed NQ trades, but is it possible for you to show your trades like I do in my journal on a chart with the entries and exits? I'm really just curious where you're in and out, how long you're in for, how many times you're in and out, etc.

You keep asking Db for his PnL, and he never shows it, but I don't think I've ever read anything about how you trade or a chart with your trades, hence why I'm just asking nicely. Thanks!


Hey RN... I do wonder if I may ask to see your trades? For the record, I do think its legit to ask Db for his PnL, but I don't think we will ever see it. Complete transparency is best, so an outlined method, the trades shown, complete with a PnL would of course be the best case scenario, but since we aren't gonna get this, what is the next best option?



But enough about me... where is your chart? Cause all we have so far is one guy screaming that he wants to see a PnL that is never produced, while the other guy saying he wants to see how he trades and yet no chart is produced. Many people reading might assume both of you are out to lunch! hahahaha

I moved this over here as I think it more appropriate



KP


You ask questions I think deserve a response



I firmly believe trading is the most personal..., and intimate..., endeavor one can pursue

I do not trade futures – I am a stock trader

I’ve never started a journal – because I’ve never needed one

You ask to see my charts – I have posted some over the years…, certainly not as many as NOD.., or others

But they are around


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

And..., I’ve never called trades

Because I do not want to be responsible to/ for others

Because if successful – I lose my edge

Because if unsuccessful – I lose my nerve..., and the ability to trade


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


I’m hanging out with Slugar and J - as I'm sure you are aware

They literally have access to any / every chart I use


They do not trade alike…, nor like me


And they will be the first to tell you – how I trade does not mean piddly piss to how they each trade

Theirs is theirs…, mine is mine


And yours..., assuming you create it - will be yours


J / Slugar - feel free to confirm / deny / call me a idiot

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


You look at a chart and see all sorts of stuff (based on you’re a.., b…, c.., summaries)

I look at a chart and see a dime novel story - and read it the same


The way I trade is so simple it’s stupid


Yet to do this – I had to recreate nearly every one of by beliefs – and it nearly ripped me apart – nearly…, but not quite


You would look at my charts and see nothing – and it would screw you up more – because I would proceed to tell you what’s there – and you still wouldn't see it

(I have done this…, and it actually fuck up a couple of people – and it something I wish I could take back – but can’t)

Never again will I be so stupid as to repeat it

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


You’ve had…, and have.., very good traders assisting you

Stick with them…, and do the work to make theirs…, your own


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


My way of trading nothing unique…, nor special… it is simply mine…, to my very soul


Literally.., there are countless ways to trade successfully - and no two people trade the exact same


RN

 

[k p]

I moved this over here as I think it more appropriate

Yes, it for sure makes more sense to move it here. I fully understand your need to keep trades to yourself, but I do believe that in some respect, you are Db are two peas in the same pod! Neither of you share what it takes to fully transparent. At the very least, which is a huge point, I can evaluate Db's method and see if it can work for me. If you have shared our method with J and Slugar, then this is great for them, but the rest of us cannot evaluate. I suppose if I have some time I can go through your posting history and see if I can find a nugget here or there since you said you've posted charts in the past.

Anyway, I find it intriguing that yes, there are a million ways to trade, and yes, I might be confused by what you do, but given that a person can only make money if price is moving in their direction, then surely your trades must be of the variety where you buy low and sell high, or sell high and buy low. The critical parts are of course the entries and exits.

I guess I was mostly curious about how long you hold for on average (ie. shortest trade, longest trade, average time in a trade), and also how many trades you put on in a day. I've mentioned in my journal that I see so many of us beginners constantly in and out, and unless one is scalping for 1 or 2 points, this strategy is simply a result of fear. So when I see people post blotters that are 3k to 4k a day, I wonder what their trades throughout the day look like.

 

[Redneck]

Yes, it for sure makes more sense to move it here. I fully understand your need to keep trades to yourself, but I do believe that in some respect, you are Db are two peas in the same pod! Neither of you share what it takes to fully transparent. At the very least, which is a huge point, I can evaluate Db's method and see if it can work for me.

This I choose to ignore

btw.., thought you said you didn't like the drama - yet you insist on perpetuating it - I find that strange


If you have shared our method with J and Slugar, then this is great for them,

Both still had to create their approach..., and forge their self into a trader

Credit is all theirs I assure you - they've worked their asses off


but the rest of us cannot evaluate.

I don't care - no one shares my losses..., no one will share my sweat..., tears.., or blood

I am selective in who I help - as recently as 3 days ago I tried to help someone who basically told me to fuck off - it was quite funny really

I suppose if I have some time I can go through your posting history and see if I can find a nugget here or there since you said you've posted charts in the past.

The only nuggets worth finding - are within you


Anyway, I find it intriguing that yes, there are a million ways to trade, and yes, I might be confused by what you do, but given that a person can only make money if price is moving in their direction, then surely your trades must be of the variety where you buy low and sell high, or sell high and buy low.

And sometimes buy high / sell higher - sell low / cover lower


The critical parts are of course the entries and exits.

Yep - this where my edge lies - mostly

I guess I was mostly curious about how long you hold for on average (ie. shortest trade, longest trade, average time in a trade),

Hold time could be measured either in cents..., time.., or PA - it varies

Sometimes it's a scalp for cents..., other times I hold till PA tells me to get off its back (traded a move)

I trade moves - I do not trade trend - but I am constantly aware of all the trends

One must trade price (or in my case price's behavior - simply readin a dime novel)



and also how many trades you put on in a day.

Today 12 trades - 2 losers - rest averaged out to little over 800 per trade - net the losses / comish / fees

Number of trades is PA enironment dependent - every time I see a signal - I take it - it is a rule

But..., I am selective when to trade - lunch..., and the open - are not typically good times for me - nor is right before an announcement..., or the close

Also depends whether I'm digging myself out of a hole - then I tend to scalp more (not the traditional sense of scalp.., but the day trader version)

The short answer is - it depends


I've mentioned in my journal that I see so many of us beginners constantly in and out, and unless one is scalping for 1 or 2 points, this strategy is simply a result of fear.

One needs to trade every signal - assuming volume is present.., and volatility not - unless one purposely trades volatility - personally I hate it

So when I see people post blotters that are 3k to 4k a day, I wonder what their trades throughout the day look like.

What another trader can or cannot do is of little consequence

You must find the trader in you

You must develop that trader to full potential

You must develop your approach

You must then exploit the shit out of it

You must foremost protect your ass

You must develop rules and a routine - then you must follow both un-waveringly until you retire
And.., You must remain detached about the entire process

Really pretty simple - just not too damn easy

Okay

Enough with the sidetracks..., get to work

You have more than enough right here from the other traders - to ignore that..., or go off on another goose chase - is slap in their collective face

Every one of us has done the work - so must you..., and I assure you.., there are no shortcuts

I'm out

RN

 

[k p]

What another trader can or cannot do is of little consequence

LOL.. Db says exactly the same thing and it is the basis of why he doesn't post his PnL.

btw.., thought you said you didn't like the drama - yet you insist on perpetuating it - I find that strange

Hmmm.. to the best of my recollection, I don't think I ever said I don't like the drama, nor do I think I am perpetuating it. We wouldn't be having this conversation if you didn't bud into Db's thread! But I do enjoy it when it does happen... I like to see the back and forth... its our little soap opera on ET!

Today 12 trades - 2 losers - rest averaged out to little over 800 per trade - net the losses / comish / fees

Number of trades is PA enironment dependent - every time I see a signal - I take it - it is a rule

But..., I am selective when to trade - lunch..., and the open - are not typically good times for me - nor is right before an announcement..., or the close

Also depends whether I'm digging myself out of a hole - then I tend to scalp more (not the traditional sense of scalp.., but the day trader version)

The short answer is - it depends

This is great info, so thanks for that!

I've mentioned in my journal that I see so many of us beginners constantly in and out, and unless one is scalping for 1 or 2 points, this strategy is simply a result of fear.

One needs to trade every signal - assuming volume is present.., and volatility not - unless one purposely trades volatility - personally I hate it

You're absolutely right about having to trade every singal, but I know that in my charts, people must be left scratching their head about why I enter. ND told me often that she can see I was chasing price based on where the entry was in relation to the bar before. I see this same thing in some of the other journal. Its by no means a criticism and I'm not doing much better. All that I simply mean is that many trades just aren't set up all that well. It if is set up well then of course, its a great trade regardless of the outcome.

You must find the trader in you

Absolutely true!

And on that note... goodnight RN... nice chatting with you!

 

[k p]

So a little update on my 5/1 BOPB analysis. I am clearly bad at following rules. As result of another member asking for where ND mentions her rule about price not closing below the trendline, it forced me to review her charts again. What I see is that I shouldn't be so quick to fan the SL since all those pokes above are in fact FBO's. So for today, if I update my analysis, then I can mark in two FBO's and not fan that SL and not make it look so messy.

A possible long that is set up up would close below the SL before it gets a chance to fill (green arrow), and although there are now closes above after this, do I really want to consider a long when price is struggling so much??

Anyway, this makes it look a little less messy.

 

[BonScott]

So just an example of the work I'm doing.

L - Here at L is a break of the 5 min DL that you can see forms from the two swing lows all the way to the left on the bottom.

M - We hit a low and then I start trailing up the entry. At M is the highest point in the retracement, so I mark an entry one point below.

N - This would trigger here, 3 bars later. The entry is at 69. If I use the bar above my entry as a possible stop, this bar has a high of 71.25.

P - This bar here, the high goes 3 ticks above the high of the bar that I would have used for my stop loss. If my stoploss was 3 ticks of less above the high of my signal bar, this would hit, and this trade would end up being a loss of 3 points. Worse, I'm no longer in this trade that ends up going for well over 10 points.

Now if there is anything I'm learning, its that having a very small stop is just asking for trouble. Unless I'm playing a reversal from a very key level and I get in very close to that level, the action of the algos might very well often take me out before I give the trade a chance to work. This moment hit me when I said the other day that I had a hunch that entering a decently set up trade has a better chance to hit a target if the target is a sufficient number of points away along with the stop, with the idea being that more is better.

Of cousre what that magic number is is what has to be tested for. But if by example I enter a trade and use only a 2 point stop or 2 point target, my trade is really at the mercy of the algos or luck. If the trade has a 5 point stop or target, perhaps there is a better chance that my target will be hit before my stop. But of course, it trading the 5 minute bars, and this of course depends on the size of the bars that day, but it almost seems like a 10 point target would be better still. No facts to back this up, but there is certainly a sweet spot. I see it in so many of my own charts from the months of data I have on my own trades, and I see it in so many of the other journals. The constant in and out is just killing us. Unless one has a plan to scalp successfully, then this in and out is based on fear and fear is not your friend when trading.

Now this of course has to be balanced with the context of the trade. If I'm entering a trade because I see the potential for only 5 points before the previous swing point is reached and that swing point is in fact the level at which I want to take my profit, I am certainly not going to give my stop 10 points while only going in for a 5 point profit. Likewise, if the bar that I use to signal my trade is far too too wide, or too far away from the breakout level and hence the level at which I would put a stop, then this trade is no good either as it would have far too much risk. But giving price a bit of room is essential to give traders a chance to actually do what is it they are trying to do without having the random nature of the algos stop you out of a trade.

As an aside, IB left me a note to tell me I have a free subscription to some news feed based on being such a good customer! (LOL... They already have over $1000 in commissions from me! I wish they just gave me a damn good deal on MultiCharts instead.)

The same BOPB on the 5 min chart. This one doesn't stop you out. When to use the 1 Min or 5 Min, we'll have to work on this.

 

[k p]

The same BOPB on the 5 min chart. This one doesn't stop you out. When to use the 1 Min or 5 Min, we'll have to work on this.

Yes, this was one excellent trade. The reason why I said it might stop you out is because ND does sometimes put her stop just above the high of the bar that sets up her trade. For this trade, this high is taken out by 3 ticks, and it also does go above the level of the break of the line. Now don't get me wrong, this is only 3 points so that is a wonder stop, but regardless of how many points, if the rule is to break the high of a bar or go through the break of the level, then this stop loss would be hit before it got a chance to work. But this trade worked beautifully, and the context of failing to go higher when there were so many chances would make me really want to hang on!

 

[k p]

A - Going into the open, there was this very obvious hinge. I had it drawn a little steeper earlier, which then made it appear to break to the upside, but since the break didn't go anywhere, I knew to be prepared for a wider hinge which is this one.

O - Right at the open, it does break up. There does also appear to be a range in here before the open, but the bounds aren't all that neat. I do have the apex of the hinge marked in, but you can see how price just goes through it multiple times.

B - So first we try up, there is even a little RET in there to go long actually, one bar before B, but this clearly didn't go anywhere.

C - Then we try down.

D - After failing at both (in a very symmetrical fashion which is focused around the apex of the hinge), I note that his bar here opens and closes on the low, so if we try for a short here, perhaps we can get a good exit after testing exits from both ends.

E - We do make a lower low, but ultimately this fails as well.

F - Now we make a higher high, above the ON level, but this quickly rejects as well.

Right about now is where Db made a post about how given that all of this is happening at the mean of the channel, we shouldn't be surprised that it's messy.

As we come down from here, even though its obvious after the fact, the trip down has highs and lows of previous bars being penetrated but then price turning. (meaning that I'd be chopped up quite badly if I'm not looking at the big picture and still trying to get into a move right in the middle of all this)

G - So we come down here, and do form a higher low. This long above this bar is marked in after the fact, so not suggesting this was a trade taken, but if we see this messy price action, but at the same time notice that we are in a range, then if price comes back up here to trigger this trade, we could certainly be going for a trip back up to the highs at F, and doing it off a higher low, both of which make sense. So at least this trade being at the extreme level of this range we have is better than a trade in the middle.

H - There is some congestion here to the right.

I - A higher high, but more congestion.

J - We can start tracking possible longs here (first one doens't fill, but the second one lower would). This bar right below "J" is actually a lower high, but this being one bar on the one minute chart this might not mean much.

K - But these lows here now break the previous lows. Far too often I am sucked into this micro price action. A 5 min DL from overnight is way below us, and even if I fanned it up to include the low that we hit at E just after the opening, we are still nowhere close to a 5 min trendline.

So although I mark a long above K, a long based on SLA, my confidence in this trade would be low. At least there would be a couple of points to get to the highs at J if an exit has to be made since I'm worried about being at the top of a possible channel and hence an imminent trip back down. (I know I shouldn't worry about what might happen, I have to focus on what is happening.)

Sure enough, this trade works really well, and by now it certainly looks like we left that range from the open.

L - Here is yet another RET, which clearly works, but during this entire up move I just kept waiting for the end of this move. Talk about the dangers of having a bias and not seeing what is actually happening.

M - Here I have not only an important level marked in from the hourly chart, although its been weeks since we were at this price level, but this level is also important because the SL that one can draw in from the very top at 4120 on the hourly chart comes right down to here. I posted this the other day in Db's thread since Roffe made a point that some downslopping trendlines would be in our area soon.

We do appear to clear it, but its just sideways action now.

SUMMARY

Well that opening today was a bit rough. Once we cleared the level, going long set up nicely, but I was still married to my short bias. Taking the long above "K" or at "L" would be the smart thing to do since price would have cleared the opening range at this point, but I keep having channels on my mind so I think it might turn back down.

Making use of 5 min trendlines today didn't really provide any opportunity. But just as I'm about to post this, I glanced over at the 5 min chart again and notice this level of resistance then support from the overnight that is well respected after the open, and even sets up the lower high I mention at G. Check out this line in dark green. I mark in E and G on this 5 min chart that correspond to these letters on the 1 min chart.

On this 5 min chart, its also quite obvious the range we have between 75 and 85, and once we clear it, its just up and up! (At the top is also a hinge, that I didn't draw in, but you can see how it clearly breaks up. There really isn't a clean entry on the 1 min chart though as there is no obvious RET after the hinge exit.)

(And for completeness, let me also attach that hourly chart so you can see that long term SL being broken at 4000)

 

[Ghost_of_Blotto]

Take a look at your 1 minute chart, consider where these fills are.

There are other approaches beyond trendlines, "break outs", and technical analysis of charts.

Of course you will make fun again for only a 3 point profit (but once again a few minute hold time). What if you had a way to identify a profitable trade at least once per day which worked 83% of the time for a profit and the rest split between scratch and small expense. Would you be concerned that your gains were "only" $60/contract or would you get on with trading more contracts?