trading ranges on NQs lately

A

arzoo

I've noticed that the NQs have been making a trading range lately before breaking out/down but before doing so, usually gives a false break then consolidates some more before the legit break.

some examples are 2/11 (after 10am), 2/12 (11am) and 2/18 (between 9:45-10:30).

i usually trade pullbacks and am trying to figure out how these breakouts are traded. are there indicators or patterns that help make a distinction between those that are false and/or the move that's follows through.

btw, sorry i had to make a few posts i cant seem to attach more than 1 file for each post.

Another pattern I've noticed is one which plays like it is reversing the trend, then passes the 20ema to a point then forms a base but fails and continues downwards (2/19 9:50am & 10:50am in red circles). how does one figure out the difference between the continuation of this pattern against one which actually falls first but is an actual reversal, like in 2/18 after 3pm.

Thanks.
 

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If you don't define your terms, the responses you get will be along the lines of "here's what I'd do given the way I define 'pullback', 'breakout', etc." The most obvious problem is that they may not define those terms the way you do.

If you're looking for "pullbacks" and "breakouts", then you're looking for trends on the one hand and consolidations on the other. What criteria are you using to enable you to spot these conditions in real time?
 
Quote from arzoo:

how does one figure out the difference between the continuation of this pattern against one which actually falls first but is an actual reversal, like in 2/18 after 3pm.
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After you learn to predict the future you can tell the difference.:D

Seriously, what I mean is there is no way to tell in advance what will happen, there are only "good bets" and "sucker bets".

In your 2/12, notice most of the pullbacks came right after lower lows. Like I always say, you can short on the way down, and be wrong once (at the bottom), or you can buy on the way down, and be right once (at the bottom). It's possible to make (and lose) money with either method.

In your 2/18 chart, notice the low of the day was retested in the afternoon, and the market failed to move lower. Also, it followed higher highs. After that your moving averages crossed. So it became a "reversal" not a "pullback". Hmm, what are the chances of breaking the low of the day, if it has already been tested in the afternoon, and failed?
 
Quote from peterfigliozzi:


In your 2/12, notice most of the pullbacks came right after lower lows. Like I always say, you can short on the way down, and be wrong once (at the bottom), or you can buy on the way down, and be right once (at the bottom). It's possible to make (and lose) money with either method.
More...

Depends on how you define "wrong" and on what you do about stops. You can short on the way down, get stopped out, short again, get stopped out again, etc., all the way down. Therefore, there's a bit more to it than just "entering the pullback".
 
I agree with you 100%, it can be difficult no matter what the trader decides to do.

Quote from dbphoenix:

You can short on the way down, get stopped out, short again, get stopped out again, etc., all the way down.
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That would really suck! Expanding triangles? Breakout methods get killed there.
 
Quote from arzoo:

I've noticed that the NQs have been making a trading range lately before breaking out/down but before doing so, usually gives a false break then consolidates some more before the legit break.

some examples are 2/11 (after 10am), 2/12 (11am) and 2/18 (between 9:45-10:30).

i usually trade pullbacks and am trying to figure out how these breakouts are traded. are there indicators or patterns that help make a distinction between those that are false and/or the move that's follows through.

btw, sorry i had to make a few posts i cant seem to attach more than 1 file for each post.

Another pattern I've noticed is one which plays like it is reversing the trend, then passes the 20ema to a point then forms a base but fails and continues downwards (2/19 9:50am & 10:50am in red circles). how does one figure out the difference between the continuation of this pattern against one which actually falls first but is an actual reversal, like in 2/18 after 3pm.

Thanks.
More...


Super inquiry. There are really good answers as well. While you picked NQ for illustrating what you are mentioning has broad application. Further, there are many other items that appear daily as well.

The basic solution to each of these considerations is not complex and once you have the guidance, you will always, prior to entry, have the assurances that you to conduct the trade in a successful manner.

I have been collecting, for about 12 months, posts similar to yours to get the scope and bounds of just what the assortment is. Gradually it became apparent that a cook book is needed with two things. A manner for quickly classifying the opportunity and secondly, the proper approach for making money for the opportunity.

Fortunately, what is nice about all of this is that it is just a matter of organizing stuff around the way things change from one thing to another as the market progresses.

It doesn't matter, it turns out, what the descriptive general gross treminology is. See the db type posts where he constantly dwells on why you can't....blah blah blah. What matters instead is reducing the monitoring of the market to a minimum set of clear signals that act as flags to make decisions that always lead you to proper actions for making money.

For example, a BO can always be differentiated from a FBO because of the flags.

When I arrange the set of market items around a loop as adjacent considerations, there is a progression from one possibility to another if and when it is gated there by a clear signal flag. If not then the item just goes to completion and you wait another opportunity.

All items progress to "entry" and they continue step by step to "exit" It is like an application of he Hermetic principle in a way.

This loop or wheel has the items on its perimeter and you proceed band by band to the "exit" in the center. If required as one beginning item changes in nature, you see that and you migrate in an angular way to the continuation of the "sequence" towards making money.

You will enjoy using it when you get the opportunity. Luckily, there is an emotional component that deals with the people part just like what I described dealswith the market money making part.

If you do not follow what I am saying that is the majority reaction. Don't worry about it; it's not your cup of tea.
 
Quote from Grob109:

See the db type posts where he constantly dwells on why you can't....blah blah blah.
More...

Ah yes, Jack. If only I could explain these things with your level of clarity.

If you do not follow what I am saying that is the majority reaction. Don't worry about it; it's not your cup of tea.
More...

Same old confidence building Jack.

They seem to be leaving you unattended a lot more often these days. Running out of funds?
 
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