Trading NQ via Price Action

[k p]

What happens if you apply these 5 second rules you're using at 930am to the test of that same resistance that occurs at 923am at a slightly lower level? When you say lower high, it's apparent you mean relative to some previous H. If you go back and review the 5s chart you overlayed on top of fortydraws chart there's at least 2 distinctions present that are in conflict with your 930am setup. I have no ego in this. I'm holding back on being more specific because I hope to learn from this discussion without revealing more than necessary to get others to be similarly discrete and simply point me in the right direction to look. If you don't have time to look further into these setups that's fine, just carry on with whatever new setups are presented today because they will likely not vary much in the ways we've been analyzing them in the past.

Yes, none of this is ironed out. I cannot exactly reproduce the type of chart that 40D, and as you say, there are some distinctions with my 5 sec charts. When the rejection is there, this is seen quite well on the 1 minute chart as well, but of course my trade would be at a much worse place, but for now I think I will still be focusing on this. The 5 sec chart will be really useful in those cases where you have to reverse quickly, but this also is something I really have to look into more.

Edit: I have added one more line at 4120, the resistance line from yesterday because even during the ON, price bounced off twice, so I'd say it certainly had an affect.

 

[fortydraws]

So today is going to be tricky.

Everyday is going to be tricky if you're trading without a plan. I'm not saying you need to adopt my plan or DbPhoenix's plan or NoDoji's plan or Redneck's plan or anyone else's plan. You need to come up with your own plan. I'll post one last chart, and then you need to take over for yourself. Good luck!

 

[k p]

Everyday is going to be tricky if you're trading without a plan. I'm not saying you need to adopt my plan or DbPhoenix's plan or NoDoji's plan or Redneck's plan or anyone else's plan. You need to come up with your own plan. I'll post one last chart, and then you need to take over for yourself. Good luck!

Sweet!

I say tricky because price isn't stuck in some neat little range with extremes that can be tested within the first few minutes after the open, and the juicy levels are far away. (although that 4145 isn't too far away) Since you say you're usually in a trade within the first couple of minutes, you must therefore also look at the initial buying and selling waves perhaps and get a sense of direction right off the open.

But moving on... just in case you missed it given all the recent posts, can you tell me what kind of chart that was that you used to illustrate the buying and selling at S/R? Its a line chart obviously, but it doesn't match up 100% with my 5 sec chart and the swing points must be based on the "closes" of the bars perhaps. Its also not nearly as fast as a tick chart given that I had to stretch it out quite a bit to get it to match when I overlaid it on my 5 sec chart. It seems that I can't do line charts in IB TWS, and my free version of MultiCharts which allows for "line on close" chart won't do anything less than a 1 minute resolution. But I'd like to at least ask a bit about that parameters of the charts you showed since they show the swing points very nicely.

 

[fortydraws]

I'm short

Now long. You can see where the activity has been.

 

[k p]

yes... we bounced off just below 4119 which was already an outlined level

 

[k p]

now we bounced off 44.25 which matches up exactly with the high yesterday afternoon

 

[k p]

Ok.. lets just get this over with. Today was an exceedingly bad day. I end at -$958. By far the biggest problem is that I can't let go of a losing trade. Sure I don't have enough experience to be messing with a lower time frame, and sure I should be in SIM, and sure I haven't backtested enough, but the absolute biggest problem is that I was holding onto losing trades, seeing the reason to take the opposite trade, and I refused to do anything about it. Here are the highlights (or lowlights to be more precise...LOL)

A - I try my first short here... and out very quickly, but still down almost 4 points.

B - I try a second short here, and out much higher up for a loss of 7 points.

I'm not even sure what happened next but I kept looking for shorts. I even commented that we bounced off 4119, but it just didn't register.

C - I try one more short here as its looking like a pretty good rejection, but this too is stopped out for a loss. I see that in real time, I have a huge problem with seeing a trend in one direction, and yet expecting or hoping for a reversal.

D - Here I finally try for a long, and out for just a little bit of profit after what looks to be a REJ at 4145. The entire time I am seeing higher lows and should have been thinking about longs much sooner.

E - I try for a long again here, and sit through sideways action to get out BE. I can't tell you how many times I've seen this in my testing... this very tight range for at least 10 minutes that eventually breaks down or up, and yet when it broke down I didn't act.

F - Here is a short at the most inappropriate time, and I held through a very serious loss before it comes back to me. I have reinforced very bad habits that did me in later in the day.

G - Quick short here after we broke below the previous low, but out real quick.

H - Another short here.. out real quick.

I - This one caused major trouble. I think I'm seeing a double top below this OH.. which isn't really in play anymore given the amount of times we have gone above and below this level. The swing low at H is also a nice bounce off the DL on the hourly chart, but I figure we still have a nice lower high and lower low on the 5 minute, so the short had promise. It wan't entered properly, but the bigger problem is that when it broke above... I did nothing.

J - When price dips right here to see if there are any sellers and finds none in this previous range... I did nothing. I simply waited for price to come back to me.

K - Huge thrust up here through the previous range to the left, and I'm just waiting for at least some sort of RET to get out at a better price.

L - And finally my exit is here for over 22 points in the negative... complete with a long that I exit quickly as well because its already been 40 points up from the bottom at H.

M - So I take a nap and come back. Took a short, this time, just for the hell of it, and once again I'm just sitting as we shoot higher and re-enter the previous range until I finally exit for another 8 point loss.

CONCLUSION

So there you have it... everything done wrong in exquisite fashion. There really isn't just one or two things to fix... lots went wrong today. I think looking at it now, its certainly not the easiest day. The long after we dipped below 4119 could have been seen and acted upon, but when we retraced down to almost this level again an hour later, going long seemed not to be in the cards, especially without hitting that low a bit closer.

All of these orders were market orders, and hence I was responsible for both in and out. I have had problems before of price taking me out right at the worst place with an auto 5 point stop loss, and often if I am going to be doing things properly, some stops will have to be wider than 5 points anyway based on the swing points. But thinking about it today, getting taken out of the market at 5 points would have been much better than my 22 point loss and several more in the 5 to 10 point range. This might have put me in a much better frame of mind to actually take the long after the nice RETs on the way up like above J.

I'm not too discouraged, but the big failure is how I choose to interact with the market (if you're drowning and need me to throw you a life jacket... I clearly might not be able to act when necessary!!!!).

I will spend the rest of the evening going over what could have happened if I didn't focus so much on the flow/behavior but just used the 1 minute bars and rejections/penetrations at the important levels.

 

[k p]

So how obvious is this. Here is the analysis of the first 2 trades. Its a 5 second chart... and although I would say it all happened so quick, its all actually pretty damn obvious.

The first short is only on a dip below the possible support level I got from overnight... not reason enough to short, and the exit was only made because of money loss... price didn't even clear the previous high.

The second short comes off a higher low.... what the heck was I thinking? Perhaps if I saw a rejection off what I thought was support at 22.50, or it dropped below that 4119 level then I could short, but here both these trades just look so dumb.

I also mark in where the long would fill at 25.50 if I went long 1 point above the 1 minute bar after seeing the rejection at that level.

Expensive lesson, but lets hope its learned... off to the next area.

(This is why I'm not ripping my hair out.... the evidence of what to do is on the chart... I can read it... I just didn't act properly. But its not like this trading thing is a foreign language anymore. Jesus... I didn't see it like this in real time but its so obvious here)

 

[k p]

Moving right along... here are the next 2 trades. Jesus.. this is some good shit. Shame its a $1000 lesson today, but I am learning lots.

 

[bh_prop]

Sorry man, not sure what to say that hasn't already been said multiple times so I will go with this:

if you *MUST* trade - and apparently you must - please do yourself a huge favor and do it only on sim until you get a) a well defined plan of action developed and b) prove to yourself that you can trade correctly for a week on sim because without those 2 things in place, more days like today are a 100% certainty.