Trading the NQ: Take 2

[k p]

Both these statements are inaccurate KP

RN

Interesting. What I mean with the first is I think that if I plan to take a REV at a key level and get in right at the level, I could almost keep a tight 2 point stop, so if price overshoots by more than 2 points, its more than likely that the reversal didn't/wont happen. But if I buy a breakout, maybe a RET after the breakout, lets say 3 or 4 points above the level, then a logical stop would be below the actual level that price broke out from, so in this case, I'm thinking a 4 or 5 point stop would be prudent just in case price tests the level again that before was resistance but now could be support.

As for the second, I'm not sure why could would be inaccurate. Some traders prefer scalping and require a high win rate, whereas another trader might be going for big win, attempting to catch a bottom of a huge move, try a few longs and get stopped out a few times, but keep trying to eventually get that huge move back up. To me, these two strategies are like night and day. (although I guess both make sure of a tight stop, but the win rates would be much different)

 

[MarketAddict]

KP,

Please tell me you have 5 min chart or higher for your main direction..

 

[k p]

KP,

Please tell me you have 5 min chart or higher for your main direction..

Absolutely! But since I'm not exactly looking to get into a trend once a trend is moving as I consider it much too late, I might not put much emphasis into it when placing a trade. When at a key level, the trend may point one way, but since this is a key level, this could be exactly what stops that trend in its tracks.

When we broke above 41 today, I was by no means surprised given the higher lows I was seeing. First was the FBO, but this only led to another higher low on the 5 min, so the eventual continuation of the up trend made sense. But like I say, at the open, price had made a very good run up, trend was up, but I'm looking for short just because of the key levels.

Would love your comments though. If I was looking to get into a trade not at a key level then doing so in the direction of the trade makes absolute sense, but this isn't what I'm doing yet.

 

[NoDoji]

Absolutely! But since I'm not exactly looking to get into a trend once a trend is moving as I consider it much too late, I might not put much emphasis into it when placing a trade. When at a key level, the trend may point one way, but since this is a key level, this could be exactly what stops that trend in its tracks.

When we broke above 41 today, I was by no means surprised given the higher lows I was seeing. First was the FBO, but this only led to another higher low on the 5 min, so the eventual continuation of the up trend made sense. But like I say, at the open, price had made a very good run up, trend was up, but I'm looking for short just because of the key levels.

Would love your comments though. If I was looking to get into a trade not at a key level then doing so in the direction of the trade makes absolute sense, but this isn't what I'm doing yet.

View attachment 151791

That first little breakout of the ascending triangle resistance is "the tease". Now, if you look at the level where price pulled back to after the tease (your 3rd higher low arrow), you'll be looking at something that is about as close as you can get to a Holy Grail in trading.

 

[k p]

That first little breakout of the ascending triangle resistance is "the tease". Now, if you look at the level where price pulled back to after the tease (your 3rd higher low arrow), you'll be looking at something that is about as close as you can get to a Holy Grail in trading.

So the question is... where to buy? Here is the 1 min chart, blue arrow showing the bar that ends up forming the low of the 5 min bar. There really is no way to know how low price will go. Price bounced off R again at 13:15, and although it doesn't make a lower low, it also cannot make a higher high. I suppose one could participate in the thrust up once we break out of the pink down-sloping trend-line, but its never safe to get in on a move like this... correct? So I'm curious at what point you would say the Holy Grail trade has presented itself and the long can be considered.

 

[MarketAddict]

Absolutely! But since I'm not exactly looking to get into a trend once a trend is moving as I consider it much too late, I might not put much emphasis into it when placing a trade. When at a key level, the trend may point one way, but since this is a key level, this could be exactly what stops that trend in its tracks.

View attachment 151791

First off, today wasn't a trend day.. .Train your brain to label the environment that you are trading in.. Price spiked down this morning and it couldn't make a lower low.. So price just retraced back to the highs.. I label this my counter trend days.. A fake trend in the morning follow by a nice counter trend move.. But I don't want to confuse you because you are still in the beginning stage..

But like I say, at the open, price had made a very good run up, trend was up, but I'm looking for short just because of the key levels.

View attachment 151791

If price is consolidating (tight range) at the high then I wouldn't try to short.. I would look for it to break out..

Chart below:

 

[k p]

First off, today wasn't a trend day.. .Train your brain to label the environment that you are trading in.. Price spiked down this morning and it couldn't make a lower low

Wow.. 30 points down and 50 points up is not a trend day? I do see what you mean though about how price couldn't make a lower low on the hourly chart, but wow, that is quite the long term view. I'm hoping to get 5 or 10 points, this isn't asking much! I didn't need a lower low on the hourly chart, I just needed to get into a short again at roughly the same area I did the first time

If price is consolidating (tight range) at the high then I wouldn't try to short.. I would look for it to break out..

Would you also say though that it could break out below.. as in break down? Here is a similar chart from Apr 8. I mark via the blue arrow here price is also consolidating at the highs, complete with higher lows (so roughly a similar setup), and yet, it doesn't break out, but rather breaks down, although not dramatically of course.

Lastly though, you mention on my chart that you annotate (thanks by the way), to wait for the long to set up. So what does a long setup look like for you? I'm tying to make sense of the bars you point to with your green arrows, but I can't see any similar features in all 4 that make me see how these set up a long in each case.

 

[i960]

Like I said KP, you should be entering your position where it feels uncomfortable. As you do this more and more and see positive reinforcement from price not deciding to drop 100 points the second you get filled then it won't be uncomfortable anymore.

You're forgetting that the price already slightly breaking resistance is an obvious tell. It did not rip through it and get smacked right back down - hence there's no reason to think it's not going there (and beyond) again.

 

[i960]

Here is a similar chart from Apr 8.

Bad example. 4/8 was FOMC meetings day with a bunch of crazy action around 1300ET.

 

[k p]

Like I said KP, you should be entering your position where it feels uncomfortable.

Everything feels uncomfortable for me! LOL... Good trades and bad... so I better not use this. And yes, positive reinforcement is exactly what I'm going for here. I'm just trying to learn to put on trades, take my losses quickly, take some profits, and also learn to re-enter if stopped out but the same trade presents itself. (why can't it drop 100 points after i get my short filled? )

You're forgetting that the price already slightly breaking resistance is an obvious tell.

When I see price penetrate a level, but come back inside, I'm not sure that I would favor another try to be honest. Its true that it didn't get smacked back down, but the fact that it didn't go higher on the breakout is worrisome. It may still, but I have no reason to suspect it will just because it tried and failed. Its true that after it fails to also get smacked back down then this is a good sign for a long, but I still think its more neutral territory.