Trading the NQ: Take 2

[k p]

Bro, what levels are you looking at? Where are you getting these levels from? Bro, you are counter trend trading and that's no good.. Those levels you have are making you a counter trend trader.. Trade the levels with the trend not against it.. You are not experienced enough to trade counter trend.. I don't want to tell you how to trade but there are a lot of obvious reason why you had loses.. This is why I recommend you put a 20 ema on your chart and follow the main price..

I get the levels from previous area where price has turned, be they the overnight highs and lows, previous day highs and lows, or swing points on an hourly chart from days ago.

If a person is going to trade reversals, does it not make sense that the reversal happens way before a calculated average of the past 20 or even 10 bars? Here is a 20 ema on the 1 minute chart. My last short I took was based on price reversing at either the thick pink level, a high on Mar 24, of even the previous day high, the green line. Clearly this reversal happens way before the EMA has a chance to catch up.

Likewise, if I back up to yesterday, we had a reversal from 4441 right at the open, and although you could say that the EMA was flattening out by that point, by the time its pointing down, the reversal already happened way before and hence entering anywhere there is riskier because you're just hoping and praying for a continuation and a strong trend, which does happen, but its still riskier.

If one wants to trade S/R, I don't think he can use any indicators because what you're looking for happens before any indicator catches up.

Today is unfortunate because I took too many shorts, and as someone was telling me in private, they weren't exactly at the level they should have been.... meaning they should have been closer to 41 if that was the level I was playing, which is true. But at the same time, price could have dropped, in which case, I would have already been in from one of my shorts. (this might be why I was a little pissy with my reply to i960 as I have already been given some shit today in private about all of my shorts... and this was another round of criticism that I wasn't prepared for)

The best short was the one I didn't take, right before the open when price hesitated at 40. If I got in there, a 2 point stop would have kept me in for quite a while, and after only one loss, and by this point seeing the higher lows, I perhaps would have abandoned looking for more shorts. But this is all hindsight so pretty much useless anyway.

To me to say trade with the trend sounds nice, but I honestly find any entries too late and these can't be taken with tight stops, unless its a very nice trend and each swing low of a 5 sec chart doesn't penetrate the previous swing low, so in essence you can buy any RET on the way up on the 5 sec chart.

 

[k p]

As a follow up to my post above, some days, the levels work like gold. Today, the levels at the open tripped me up and it would have been better to follow the trend that was forming. But a trend will always stop dead in its tracks, and often this happens at a level that might be on your chart so you can get a heads up.

 

[toucan]

OK... here are my NQ trades... as discussed above, what i saw premarket was a lot of chop in a 10 point range, so I was looking for a breakout above the overnight high or below the overnight low. I know you don't want to trade with the trend, but thats what I do and you can see my trades below.

after the open, price moved up just above the overnight high and then pulled back about 6:38 pacific time to the overnight high... you can see the 3 red bar pullback on the first trade just before the entry. I got a bad fill on my market order as you can see, and price moved against me after a couple of bars. But price didn't hit my stoploss and then moved up to the high of yesterday. My profit saving stop was hit so made a profit.

Price then moved up/down for a while and then moved above the high of yesterday and pulled back right down to the high of yesterday right after 9am pacific time. I mostly trade pullbacks so i placed a market order when price moved back up in the trend direction. price moved up from the entry and my profit saving stop was hit and a profitable trade.

 

[weasel2]

K P
I don't like to comment on how consistent my winning trades are. Its bad luck, every time I say something about my wins its like a jinx on my trading. In one moment you are over thinking your trades {fear} then with the 5 sec chart its like a panic and you are just hitting sell, sell, sell to try and catch a move. I watch a 25 tick chart along side a 1 min chart, it gives me a better perspective of what is happening at the moment then I keep an eye on the 5 min chart for reference. Everyone has a different approach to trading, for me it all boils down to trusting in your back testing no set up is ever right 100% of the time if you see a trade setting up that you know works out most of the time then pull the trigger and trust it will go your way. If you have ever ridden motocross bikes on a track and come up to a big jump all you see is a wall of dirt but you trust in your bike and your experience that you will hit the landing on the other side just right, sometimes not but you get back on the bike and continue to hit the jump until it is perfect. The 2 pt stops you are using might be a bit small to keep you in a trade and make money.

 

[k p]

OK... here are my NQ trades... as discussed above, what i saw premarket was a lot of chop in a 10 point range, so I was looking for a breakout above the overnight high or below the overnight low. I know you don't want to trade with the trend, but thats what I do and you can see my trades below.

after the open, price moved up just above the overnight high and then pulled back about 6:38 pacific time to the overnight high... you can see the 3 red bar pullback on the first trade just before the entry. I got a bad fill on my market order as you can see, and price moved against me after a couple of bars. But price didn't hit my stoploss and then moved up to the high of yesterday. My profit saving stop was hit so made a profit.

Price then moved up/down for a while and then moved above the high of yesterday and pulled back right down to the high of yesterday right after 9am pacific time. I mostly trade pullbacks so i placed a market order when price moved back up in the trend direction. price moved up from the entry and my profit saving stop was hit and a profitable trade.


View attachment 151860

Interesting... thanks for your chart toucan... looks like you did quite well today!

First question is your blue doted line that you seem to refer to your overnight high seems to be at about 43 or so, perhaps even 42. I've got my overnight high at 45... how did you get your level?

Second, it seems to got filled around 49 or 48 and price did trade down to about 44/43, so I take it price would have gone against you a good 5 points. Clearly this is within your stop or else you would have been stopped out. It seems that you wait for quite a while to get in, but then you also have a large enough stop to cover the test down to the level again, am I understanding this right?

 

[toucan]

Interesting... thanks for your chart toucan... looks like you did quite well today!

First question is your blue doted line that you seem to refer to your overnight high seems to be at about 43 or so, perhaps even 42. I've got my overnight high at 45... how did you get your level?

Second, it seems to got filled around 49 or 48 and price did trade down to about 44/43, so I take it price would have gone against you a good 5 points. Clearly this is within your stop or else you would have been stopped out. It seems that you wait for quite a while to get in, but then you also have a large enough stop to cover the test down to the level again, am I understanding this right?

oh yeah... did well on NQ but lost on non index trades so net was more of a breakeven today

my overnight high is calculated from the highest price from first bar of the new day that started at 12:00:01am to the last bar at 4:59:59am just prior to the 5am pacific time futures open.

You have this about right... my stoploss is 6 nq points so i am able to withstand more of a pullback than your 2 points, but i am going for larger profits... didn't get them much today, but still ok for me. the first trade was for 6 points and the second trade was for 16 points so i am still happy with the risk/reward ratio. not sure what you mean by waiting quite a while to get in... maybe by your 5 sec charts yes, but for my 600 tick charts i placed the orders really quickly after price turned back up... the first trade was late in the first green up bar so kicked over into the second bar or i would have entered on the first bar. the second trade also entered on bar 2 after price turned up again.... thats a good as it gets for me.... no perfection here

 

[k p]

K P
I don't like to comment on how consistent my winning trades are. Its bad luck, every time I say something about my wins its like a jinx on my trading. In one moment you are over thinking your trades {fear} then with the 5 sec chart its like a panic and you are just hitting sell, sell, sell to try and catch a move. I watch a 25 tick chart along side a 1 min chart, it gives me a better perspective of what is happening at the moment then I keep an eye on the 5 min chart for reference. Everyone has a different approach to trading, for me it all boils down to trusting in your back testing no set up is ever right 100% of the time if you see a trade setting up that you know works out most of the time then pull the trigger and trust it will go your way. If you have ever ridden motocross bikes on a track and come up to a big jump all you see is a wall of dirt but you trust in your bike and your experience that you will hit the landing on the other side just right, sometimes not but you get back on the bike and continue to hit the jump until it is perfect. The 2 pt stops you are using might be a bit small to keep you in a trade and make money.

That's for the additional info. I find it a bit odd that at the end of your message, you fall back onto a backtested plan, which of course is the right answer, but you open up with bad luck and not wanting to jinx your trading! LOL I just asked simply to understand if you are consistently profitable or not, simple as that. I've had great 10 point trades in these past 2 weeks, and here I am starting my new journal with a crappy day... hopefully today is an outlier.

About my stops.. that is a tough one. Today, those swings matched up with exactly the type of environment where 2 points stops were killers. If I had a wider stop, I for sure would have still lost, but maybe not 4 times on the 4 different shorts. My first long might have also turned out better. But for the most part, my entries were always in the complete opposite direction of where price was going, so there was no need to keep holding on. I'm simply more comfortable with a smaller stop and re-entry right now I think than just getting to try 2 trades a day and have to be done if I take a 5 point stop or so. But I will for sure figure things out better as I move forward.

 

[k p]

You have this about right... my stoploss is 6 nq points so i am able to withstand more of a pullback than your 2 points, but i am going for larger profits... didn't get them much today, but still ok for me. the first trade was for 6 points and the second trade was for 16 points so i am still happy with the risk/reward ratio. not sure what you mean by waiting quite a while to get in... maybe by your 5 sec charts yes, but for my 600 tick charts i placed the orders really quickly after price turned back up... the first trade was late in the first green up bar so kicked over into the second bar or i would have entered on the first bar. the second trade also entered on bar 2 after price turned up again.... thats a good as it gets for me.... no perfection here

I am actually hoping for larger profits too... 10 points at least, but will take 5 if it come back to me, and I might be very tight with a +10 trade as well by trailing my stop up, so unless we got to +10 on a trade and it keeps blowing higher, I might not give it much room to retrace.

What I meant by waiting was that it seemed that you were playing the overnight level. So if you saw the bounce, and you knew that your stop would be the overnight level, then why not enter sooner so you didn't have to take a full 6 point stop. But I think perhaps I am mistaken with how you are doing things, and its not so much about the level, but just about seeing price rise a certain amount first, and your 6 points might be a fixed stop and not in relation to some level or swing point.

Thanks again for sharing... I really do appreciate seeing what people actually do versus just telling me what I should have done after its obvious to everyone. I say that if they didn't do what they are telling me that I should have seen and acted on, then they are no better at this than me. I honestly, honestly think that if I was ever to teach this, which at this point I clearly have no ability to do, I would show someone what I do, and then let them ask questions about what they see and why I did certain things. If they try to teach me, but then I see that they aren't even in fact putting on the trades that they seem to think are according to their plan, then I really have to question why they aren't following what they are teaching. Or better put, it comes back to that saying "Do as I say, not as I do."

 

[toucan]

What I meant by waiting was that it seemed that you were playing the overnight level. So if you saw the bounce, and you knew that your stop would be the overnight level, then why not enter sooner so you didn't have to take a full 6 point stop. But I think perhaps I am mistaken with how you are doing things, and its not so much about the level, but just about seeing price rise a certain amount first, and your 6 points might be a fixed stop and not in relation to some level or swing point.

I trade differently from many traders in that I use fixed length stoploss and not some level or swing point.... I got to this point after many years of reviewing my trading and I am very comfortable with it. it all comes down to what i am comfortable with max risk and profit giveback.

I am also automated... all i have to do is watch for price to get near a support/resistance area when price is trending, then find a pullback and turn on automation... the automation then places entries/stoploss/variable stops and exits.... all the trade management stuff. I usually turn on automation during the pullback and automation waits for price to return back in the trend direction before entry. My entries are not as quick as others, but i like trading this way

 

[k p]

I trade differently from many traders in that I use fixed length stoploss and not some level or swing point.... I got to this point after many years of reviewing my trading and I am very comfortable with it. it all comes down to what i am comfortable with max risk and profit giveback.

I am also automated... all i have to do is watch for price to get near a support/resistance area when price is trending, then find a pullback and turn on automation... the automation then places entries/stoploss/variable stops and exits.... all the trade management stuff. I usually turn on automation during the pullback and automation waits for price to return back in the trend direction before entry. My entries are not as quick as others, but i like trading this way

Good stuff!

My trading is automated as well. I turn on the fear part of my brain once in a trade, and it starts sliding the targets/stops up and down based on how quickly the right tick moves. LOL (just kidding of course... I'm past that point now)