Trading NQ via Price Action

[k p]

In any case, there was no long, unless you've found through your testing a way to enter parabolic moves or you entered at the open. The trade is the short at 72.

There is technically a RET here at the green up arrow for a long at 71, no? I didn't take this given that important level at 73 and the LOLR being down, along with the fact that as you say the effort to retrace the down move from yesterday was quite feeble, but a pure SLA trade based on the first RET after breaking out of the range would be a long here, no?

Second question would be about how you get into a short at 72. You must be basing this on a tick chart, is this correct? Even drawing in a DL from the open wouldn't have it broken yet until below 72. I can certainly understand the context of all this based on the hourly chart, but a short at 72 seems extremely aggressive without much to go on yet so if you could elaborate on this, that would be great!

 

[fortydraws]

Therefore, before the open, the only thing I was looking at was 4246 and 4254. Unless and until price broke out of that, nothing else mattered. If and when it did, an hourly chart is a click away. I suspect that 40d had the same sort of focus. Without it, one dithers.

DbPhonix, given what you posted this morning before the open, and what you posted here in KP's journal, I can say that there seems to be little if any difference in what we were focused on. In fact, I saw your post about the morning buyers/sellers dance and though you did not post the levels, I knew exactly which levels you were referring to. The only difference I can see is that you beat me to the short with your 72, as I didn't sell until 71. Also, I did get long less than 2 minutes after the open. Most days, but not all, my first trade is within 15 to 90 seconds of the open.

 

[dbphoenix]

There is technically a RET here at the green up arrow for a long at 71, no? I didn't take this given that important level at 73 and the LOLR being down, along with the fact that as you say the effort to retrace the down move from yesterday was quite feeble, but a pure SLA trade based on the first RET after breaking out of the range would be a long here, no?

If you've found during your testing that it's a good idea to enter that late, then sure. Otherwise, no.

Second question would be about how you get into a short at 72. You must be basing this on a tick chart, is this correct? Even drawing in a DL from the open wouldn't have it broken yet until below 72. I can certainly understand the context of all this based on the hourly chart, but a short at 72 seems extremely aggressive without much to go on yet so if you could elaborate on this, that would be great!

No tick chart, no DL. Just short the failure. If you're watching it live, you can see the lower high. Otherwise, probably not.

 

[dbphoenix]

DbPhonix, given what you posted this morning before the open, and what you posted here in KP's journal, I can say that there seems to be little if any difference in what we were focused on. In fact, I saw your post about the morning buyers/sellers dance and though you did not post the levels, I knew exactly which levels you were referring to. The only difference I can see is that you beat me to the short with your 72, as I didn't sell until 71. Also, I did get long less than 2 minutes after the open. Most days, but not all, my first trade is within 15 to 90 seconds of the open.

I didn't mean to imply that I took it at 72. But the failure is at 72. Where one takes the short depends on the condition of his testicles. Naturally the closer one gets to that lower high, the tighter his stop can be, if he uses one. In this case, 70 would have been fine, or even 69.

As to going long at the open, it was a little too busy for me.

 

[k p]

Where one takes the short depends on the condition of his testicles. Naturally the closer one gets to that lower high, the tighter his stop can be, if he uses one. In this case, 70 would have been fine, or even 69.

This is most excellent. Having spent some time with dabbling in the lower time frame charts, it looked messy, and this is where I've racked up some of the losses But at the same time, I know this is because I was doing this at inappropriate levels (ie. In the middle of nowhere) and hence its no wonder why it didn't turn out well. But obviously a lower high on a tick chart below an important level is much different than a lower high anywhere else.

Hence doing the right thing at the wrong place is no different than just doing it all wrong anyway. So then you're left to wonder what part of it went wrong. Sometimes, its the right thing at the right place that just didn't turn out well (ie. not enough buyers to push price higher). So it takes a bit of time to analyze, especially internally, where the problem actually is, and if anything is actually being done well. (ie. what part needs to be changed and what part is working well)

 

[k p]

DbPhonix, given what you posted this morning before the open, and what you posted here in KP's journal, I can say that there seems to be little if any difference in what we were focused on. In fact, I saw your post about the morning buyers/sellers dance and though you did not post the levels, I knew exactly which levels you were referring to. The only difference I can see is that you beat me to the short with your 72, as I didn't sell until 71. Also, I did get long less than 2 minutes after the open. Most days, but not all, my first trade is within 15 to 90 seconds of the open.

I love your rationale fortydraws. About 2 minutes after the open we are at the overnight high, did this have any significance for you? We spent almost 4 minutes going above and below 62.50, but if you got in below this then you could watch this without sweating too much I guess, but right at this level, we certainly made equal excursions above and below 62.50 so was this not tricky for you?

 

[fortydraws]

I love your rationale fortydraws. About 2 minutes after the open we are at the overnight high, did this have any significance for you? We spent almost 4 minutes going above and below 62.50, but if you got in below this then you could watch this without sweating too much I guess, but right at this level, we certainly made equal excursions above and below 62.50 so was this not tricky for you?

I was filled between 55-56 on my longs and used a 2 point stop loss. This was about a minute and a half after the open, give or take a few seconds. Any pause or "excursion" (I prefer the technical term "wiggle and jiggle,") at 62.50 could mean nothing to me without a lower low and either a demand line break, or a trendline break. These events did not occur until the failure at 72.75, imo. For example, one could make the case that there was a demand line break during 9:34, imo. But the 1960 low was not followed by a lower low. 1959.75 then became a trailing stop level, but there was no lower low to create a short or to stop out of the longs. So 1960 became a new swing low point on which to place a fanned demand line. This line was broken during 9:42, and was followed by the lower low at 71. Like I said earlier, trading, for me, becomes just about a mechanical exercise: I track supply and demand with supply lines and demand lines (I rarely draw these anymore, but I can imagine them pretty well - they're only "in my head" anyway), and I trade when price confirms (LL/HH) a potential shift in the balance, so long as the shift is occurring at what I have pre-determined to be a potential reversal level based upon how traders reacted at that level before. All of this is my opinion only.

 

[dbphoenix]

I've said this before, but the best advice I've ever received was from Teresa Lo back in '98: if it doesn't go, you don't want to be there. This pretty much takes care of the whole hope thing.

 

[k p]

I was filled between 55-56 on my longs and used a 2 point stop loss. This was about a minute and a half after the open, give or take a few seconds. Any pause or "excursion" (I prefer the technical term "wiggle and jiggle,") at 62.50 could mean nothing to me without a lower low and either a demand line break, or a trendline break. These events did not occur until the failure at 72.75, imo. For example, one could make the case that there was a demand line break during 9:34, imo. But the 1960 low was not followed by a lower low. 1959.75 then became a trailing stop level, but there was no lower low to create a short or to stop out of the longs. So 1960 became a new swing low point on which to place a fanned demand line. This line was broken during 9:42, and was followed by the lower low at 71. Like I said earlier, trading, for me, becomes just about a mechanical exercise: I track supply and demand with supply lines and demand lines (I rarely draw these anymore, but I can imagine them pretty well - they're only "in my head" anyway), and I trade when price confirms (LL/HH) a potential shift in the balance, so long as the shift is occurring at what I have pre-determined to be a potential reversal level based upon how traders reacted at that level before. All of this is my opinion only.

Thanks so much for this 40D. I like the qualification of needing a lower low AND a DL break. I'm not at home right now and hence can't look into the outlined example at 9:34, but I'm eager to see this with my own eyes.

Any time you feel like throwing up some charts like you did last summer you're more than welcome to!

 

[k p]

Charts are cumulative, and they culminate in whatever the market presents you at the time you're ready for your session.

I draw weekly, daily, and hourly charts. I do not drag all of that forward to whatever it is I'm using to prepare for the day because I know it, and the more junk one has on his charts, the less likely he is to take the right trade. Or any trade.

Therefore, before the open, the only thing I was looking at was 4246 and 4254. Unless and until price broke out of that, nothing else mattered. If and when it did, an hourly chart is a click away. I suspect that 40d had the same sort of focus. Without it, one dithers.

No tick chart, no DL. Just short the failure. If you're watching it live, you can see the lower high. Otherwise, probably not.

I've said this before, but the best advice I've ever received was from Teresa Lo back in '98: if it doesn't go, you don't want to be there. This pretty much takes care of the whole hope thing.

I wanted to add these 3 of your comments together because they are really helping the focus. I also very much appreciated the time spent a week ago or so going over that range we were in and discussing what can be seen. At that time, as now, it was the failure of something, which was a failure to go above the previous high, which ended up being the previous day high as seen on the hourly chart that set up the trade.

Here you once again outline the importance of the daily and hourly, and seeing this failure.

I also like how in the post you mention waiting for the range of 46 to 54 to break, and then looking to the hourly.

Lastly, seeing how 40D is using such tight stops, and your most recent quote about "not wanting to be there if it doesn't take off" really helps to zone in the process, and combining what is being seen with what should be done.