Orderflow is hard. I don't like it. Moreover, I don't have the capability to automate. Using >= daily timeframe to make decision for daytrade, personally, is guessing. That's my view. The most interday data that I use for daytrade is yesterday's intraday data although it's not necessary.
Trading one Asset only
- Thread starter Jdesey
- Start date
(I'm assuming that you're struggling with focus on intraday trading, because on swing trades with options you should not be all over the place due to lack of focus)
SPY and QQQ are very highly correlated, and if one can trade the QQQ, then one should also be able to trade the SPY without any issues. I suspect that your success with QQQ had to do more with a streak of luck. (Only you know your stats.)
Yes, being focused on one instrument helps, but at the expense of very limited number quality setups. There simply are not that many good quality intraday set-ups in one instrument.
In your case I’m afraid that there are possibly other variables that will need to addressed otherwise you might end up transferring your weaknesses from one instrument to another.
A good intraday price action trader can trade M1 TFs on four instruments. (four charts of M1 charts for timing the entries on one monitor, and four charts with higher TFs on another monitor for reading the PA context and setups). Otherwise intraday trading becomes inefficient and stressful waste of time.
Pre-market preparation is the key. You need to draw your levels of interest (where to expect sellers/buyers) while the market is closed, and then you just update it during the day. Then you just wait if you’ll get set-up around those levels.
There is no need to be glued to the monitor as an intraday trader, you just place alerts around your levels and then go and do something else (washing your car, or gardening, or whatever), and just come back to your monitors say every 30mins or when your alerts go off.
Apart from preparation, you must know exactly what setup you'll need to see on the higher TF so you can get the direction right, plus you need to know exactly what you need to on your lower TF to get your discounted entry, tight SL and your timing right.
If you are timing entries on M5 TFs and are reading the PA context say on the M15 TFs, then intraday trading up to six instruments is manageable. Anything more than that becomes a problem because it becomes difficult to remember the detailed PA on more than six instrument. (It’s because or memories can hold on average around seven chunks of information.)
Once you see a setup developing, you just close all the chart with the other instruments to prevent any distractions so you can plan your trade calmly before you get the timing trigger on the M1 or M5 (or whatever). Since you'll have your charts thoroughly marked up, you’ll know in advance where your targets will be and if there will be enough space for reasonable R/R. This way the trade planning should not take too long (you just go through your checklists).
The only time I’d suggest focusing on one instrument only, say SPX, is if you’d be monitoring intraday he changing market dynamics, and marrying that together with your PA trading.
PS: Take @Scataphagos’ comments with a grain of salt, his TA skills are at beginners’ level. He's just an attention seeker.
Don't make my mistake and confuse a bull market with skills.
SPY & QQQ are quite correlated, if you can trade one you should be able to trade the other unless it is pure luck?
Yes. The ES and NQ tend to make their moves at approximately the same time. NQ is more volatile, ES has greater liqidity and can trade bigger size. Traders can pick whichever one they want.
While the two are similar, correlations within the index could be different and sector concentrations could mean different reactions to market events and macro hedging activity in one index could result in different volatility behaviors.
i am a sort of beginner trader just starting out last July (currently in my 13th month of trading, registered a small profit +20k on a 100k account during my first year). I also exclusively just trade one asset, the HSI futures. Tried to touch NQ and ES but ended up in vain. My approach now is to improve my craft on HSI futures to a point of consistent profit and concurrently studying/forward testing the NQ and ES before putting real money again on the US indices futures.
I don't think it is necessarily true that "highly correlated" means you can easily trade the other instrument. It really depends on your trading strategy.
When a given technical setup occurs in QQQ, it might not occur in SPY and vice-versa. And also the risk on that technical setup is different on the QQQ versus SPY even after adjusting for the fact that QQQ is generally more volatile. So that skews your entire risk/reward framework.
Not saying you will be unable to port over your strategy to a different market, but I think you are going to be surprised when you realize it is not just a simple copy and paste job.
I was not referring to optimised mechanical trading.
A good price action trader can trade almost any asset class with success. (apart from options, and illiquid penny stuff).
If a trader can trade QQQ but not SPY (or vice versa) , then it is a major red flag.