Trading NQ via Price Action

[k p]

You're getting ahead of yourself again. None of this is available to you in real time.



For the moment.

Now, consider what you have to use once price has failed to exceed "B" (ignore everything after "B"):

With regard to your first "ranging" rectangle, what can you look for to tell you whether traders intend to go back to ranging after price has left "B" or possibly initiate a trend downwards?

Ok... if you mean the blue one, the smaller range from just the overnight, referring to this new chart, I mark a swing low from the overnight at C. We can see that on the same bar where price rejects at B, price makes it below C to get to D. So the fact that we made a lower low is of some significance.

If your question refers to the larger red trading range... well... it probably can't because at this point we don't even know this will be a wider range yet, so your question must refer to the blue one.

 

[dbphoenix]

Ok... if you mean the blue one, the smaller range from just the overnight, referring to this new chart, I mark a swing low from the overnight at C. We can see that on the same bar where price rejects at B, price makes it below C to get to D. So the fact that we made a lower low is of some significance.

And what if anything can you do about this in order to ride what may or may not become a trending move?

 

[dartmus]

You're getting ahead of yourself again. None of this is available to you in real time.



For the moment.

Now, consider what you have to use once price has failed to exceed "B" (ignore everything after "B"):

With regard to your first "ranging" rectangle, what can you look for to tell you whether traders intend to go back to ranging after price has left "B" or possibly initiate a trend downwards?

Thanks for this post. It clarifies what I should have been looking for. A range bopb or what some might call a range pb, though I am not sure that the context I saw the words range pb in are the same context as a range bopb.

I will get that sorted out in time. Meanwhile just know this post has helped me immensely as ranges are my weakest area.

 

[k p]

And what if anything can you do about this in order to ride what may or may not become a trending move?

We can short... somewhere. Given that these are hourly bars, if we wait to short below these hourly bars, we can below the crest of the RET which puts us in a short at E.

But given that we are probably looking at the minute chart anyway, the fact that we broke below that low at C means that taking a short below this bottom of the range is a better entry if price does in fact drop below this range again. We see that the hourly bar makes the lower low at D but comes back up, but once price goes below again then for sure there is a RET in there to short below on the 1 minute chart.

 

[dbphoenix]

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Can we know at that point after rejecting going higher, that it's likely to test the opposite direction. The lod and perhaps even yesterdays lod? Or should I be looking at some other properties or concepts all together different from what I'm thinking about?

All you have is what's in this segment. There is no "yesterday" or "lod".

If a range had by now been established then one might consider a move to the first swing low in this segment, but there's no particular reason to do so. There is as yet no range (except for the narrow one up between "A" and "B"), nor is there a trend channel. Price might just drop just below the bottom of the A:B range and move sideways again. Or drop halfway to the last swing low before moving sideways. Or reverse and test "B" again. Or drop all the way to the last swing low. That's where trade management takes the tiller.

 

[dbphoenix]

We can short... somewhere. Given that these are hourly bars, if we wait to short below these hourly bars, we can below the crest of the RET which puts us in a short at E.

But given that we are probably looking at the minute chart anyway, the fact that we broke below that low at C means that taking a short below this bottom of the range is a better entry if price does in fact drop below this range again. We see that the hourly bar makes the lower low at D but comes back up, but once price goes below again then for sure there is a RET in there to short below on the 1 minute chart.

The interval is irrelevant. And retracements are off the table. Don't get ahead of yourself.

If price drops below C, what are the probabilities that it will continue a downward move as opposed to recoiling and heading back to B?

 

[k p]

If price drops below C, what are the probabilities that it will continue a downward move as opposed to recoiling and heading back to B?

I think all we can say is that the probability is greater. If traders wanted to go higher, they would have above B. If they wanted to just test the selling, they wouldn't have dropped below C, it would have held as support. But since we couldn't go above B, and dropped below C, going lower is the LOLR.

 

[dbphoenix]

I think all we can say is that the probability is greater. If traders wanted to go higher, they would have above B. If they wanted to just test the selling, they wouldn't have dropped below C, it would have held as support. But since we couldn't go above B, and dropped below C, going lower is the LOLR.

Which is what the testing is all about.

 

[samuel11]

I think all we can say is that the probability is greater. If traders wanted to go higher, they would have above B. If they wanted to just test the selling, they wouldn't have dropped below C, it would have held as support. But since we couldn't go above B, and dropped below C, going lower is the LOLR.

That’s the kind of stuff that goes through my head in real time. Reading the book I suggested earlier is what helped me.

 

[k p]

So do you actually have a number worked out that you refer to in your head to let you know how confident you are in this particular trade? What would your parameters be for the context of this trade? I think something like an overnight range, a test of the previous swing high that is rejected, a test of the previous swing low that is penetrated.... and now figure out how often it goes lower rather than higher again? And these stats you would collect for the hourly chart?