Trading the NQ: Take 2

[k p]

Starting this new journal simply to allow for a place to show some charts and have discussions. I'm not saying I will post every day, but instead of getting off topic in other journals, all my charts can go in here.

I don't have a solid trading plan yet, if I did, this would just be a psychology journal, but in a nutshell, I'm mostly looking to trade support and resistance. We either get a reversal or continuation at a key level, so I want to get in on the move as soon as possible, and hopefully get the direction right more often than wrong.

One of the major changes from my first journal, a big step forward, is to keep losers small, and let winners run. I still have trouble letting winners run, and if I was trading multiple contracts, then letting the winners run on just one after already taking some profits would be much easier, but since my entries aren't stellar just yet, trading only one contract is necessary.

Going forward, I plan to make my journal entries much shorter and focus mostly on just the trades I took.

 

[k p]

My first long on this chart is based on a the reaction spike up, hence why its a little late, but I just wanted to make sure buying would come in.

As we approach 4441, I know we turned here before during the overnight, and I know its a high from the 13th, but I don't know what traders will do with it. I'm already in a long, so I've got breathing room to get out if need be, and I'm already in if it shoots higher. It spikes up, drops below, and eventually I'm taken out.

Usually I would be looking for a short at the ONH, but since I'm already in a long, that has to be exited first, hence why there is no short entry up there. After the long is exited, the most ideal place to short is gone.

2nd trade, the short, happens after a fairly quick move down, but we drop below the opening low, retrace back up, and I hit sell as we start to come down again. I'm stopped out for 2 points right away, and how nice it is to have such a tight stop!

There is a swing low at 4424 at about 10:06 which forms almost a double bottom at 10:09, but honestly, I would have taken the first bounce, gotten out maybe BE, and would have more than likely not taken the second one, which works... but who knows. (this was all happening while I was typing, so perhaps this journal isn't a good idea just yet as its giving me an excuse not to take a trade to save myself from a loss, but at the same time, its also not allowing me to make money)

 

[k p]

Oh.. and most importantly.. the rules for my journal.

Everyone is allowed to post, but I won't entertain any questions/discussions about the merits of price action. If you don't want to use price to guide your trading, don't, and no need to waste your time and mine to convince me.

If others want to post their NQ charts... go for it! (please only stick with NQ) But what I want to see is a clear mark by the platform of where the stop and exit are. Heck, even if you want to show a chart from your SIM trading, this is fine, but in order for everyone to learn, I think we need to see where the entry is and where the exit is.

 

[BonScott]

A short on the rejection of the highs early on would have been a great trade to take, but its hard to be long and short at the same time. I know there was 20 points from top to bottom this morning, but it was still a bit of a rangy, choppy day today.
Hopefully you will get a chance this week to try it out on a trending day.

 

[eminiman414]

Since 40/41 is the extreme. To me a spike into the level with no follow thru is reversal behavior. Catch the longs etc.

 

[toucan]

My first long on this chart is based on a the reaction spike up, hence why its a little late, but I just wanted to make sure buying would come in.

As we approach 4441, I know we turned here before during the overnight, and I know its a high from the 13th, but I don't know what traders will do with it. I'm already in a long, so I've got breathing room to get out if need be, and I'm already in if it shoots higher. It spikes up, drops below, and eventually I'm taken out.

Usually I would be looking for a short at the ONH, but since I'm already in a long, that has to be exited first, hence why there is no short entry up there. After the long is exited, the most ideal place to short is gone.

2nd trade, the short, happens after a fairly quick move down, but we drop below the opening low, retrace back up, and I hit sell as we start to come down again. I'm stopped out for 2 points right away, and how nice it is to have such a tight stop!

There is a swing low at 4424 at about 10:06 which forms almost a double bottom at 10:09, but honestly, I would have taken the first bounce, gotten out maybe BE, and would have more than likely not taken the second one, which works... but who knows. (this was all happening while I was typing, so perhaps this journal isn't a good idea just yet as its giving me an excuse not to take a trade to save myself from a loss, but at the same time, its also not allowing me to make money)

always trade first and post later.... ALWAYS

the first trade wasn't late.... it was so soon after the open, its almost impossible to get in any faster... nice trade

the second trade you did good to exit at your stop... nice trade management.... be careful on your setups though, because you are using a 5 sec chart, that pullback setup you took could have been noise that you wouldn't see on a higher timeframe chart. you may want to set a minimum number of bars pullback before entering on a 5 sec chart.

good luck

 

[k p]

Since 40/41 is the extreme. To me a spike into the level with no follow thru is reversal behavior. Catch the longs etc.

Catch the long??? I'm not sure I understand since I think you mean to suggest a short.

The fact that I was in a long is what prevented me from taking a short trade. Knowing I use a really tight stop, I want/need to get in early, and after the long was exited, I was looking for at least a tiny RET, but price just plunged, and then it was too late to take any trade based on the reversal at 40/41.

 

[k p]

always trade first and post later.... ALWAYS

the first trade wasn't late.... it was so soon after the open, its almost impossible to get in any faster... nice trade

the second trade you did good to exit at your stop... nice trade management.... be careful on your setups though, because you are using a 5 sec chart, that pullback setup you took could have been noise that you wouldn't see on a higher timeframe chart. you may want to set a minimum number of bars pullback before entering on a 5 sec chart.

good luck

The reason I say late is just because I reacted... and I hate reacting because this does get me in trouble. The fact that this long was also just below the high after the open, the first little spike up after the open made this a bit worrisome because we could have turned again at 4437.50, but hey, if I keep thinking about stuff I'm worried about, I will never put a trade on!

that pullback setup you took could have been noise that you wouldn't see on a higher timeframe chart. you may want to set a minimum number of bars pullback before entering on a 5 sec chart.

Excellent point here, and something that very much does worry me about using 5 sec charts. I'm using price action that almost might not even really be there. At the same time, when it works, it just works, such as this trade I didn't take which I'm still bothered by. The action is quite neat and everything is quite obvious. The main reason I didn't take it is that on the 1 min or even 5 min, it is a series of lower high, so in this case, I eventually do favor penetration of the level, but it might still bounce a few more times. Truth be told, I just didn't want to lose $40, so I skipped out on making $100. I think you did tell me once that you don't take a reversal from a range extreme unless price traveled to the opposite extreme first. In this case, we never did make it up high again, so perhaps this was reason enough to be cautious.

 

[k p]

A short on the rejection of the highs early on would have been a great trade to take, but its hard to be long and short at the same time. I know there was 20 points from top to bottom this morning, but it was still a bit of a rangy, choppy day today.
Hopefully you will get a chance this week to try it out on a trending day.

Yup, that was the one sweet trade and something I look for because I see that the overnight levels provide a huge amount of opportunity, and the fact that 41 was already an extreme made this even more so.

Those great trending days do come... and yesterday was one of them. Had I held my long once we broke above the ONH yesterday, I could have easily gotten 20 points. Drats.

 

[fourtiwinks]

Since 40/41 is the extreme. To me a spike into the level with no follow thru is reversal behavior. Catch the longs etc.

I believe what eminiman414 meant was that the spike at 40/41 took out the longs..