Trading the e mini nasdaq

Thank you, Div! Have a good day.

Edit: Follow up query please. Based on trading method, we would've put a sell limit order around the encircled area as price pulls back to it. Perhaps I am not seeing something or maybe I have a wrong understanding of how the method is traded?



Thoughts?

Thank you very much!

David

David - you just missed the 123 long that formed just after the swing low, which would have voided the short Limit order.

The swing low was also what I would call a "Double Bottom Higher Low" (get your head around that !), ie. another sign to cancel the short order.

Hi Jtrade!

Thanks for the feedback. It's more clear to me now.

I definitely need to spend more time reading charts in order to recognize valid 123s (both large/more recognizable and small/less recognizable).

Thanks again!

So what trade if any would you have put on in the area? Would u have taken a pullback long after the long 123 took out the previous high?

Hi Rgo,

In my humble opinion, I think Div would've put a buy limit near but below the high of point 1 of the new 123.

David

You have to be careful around such areas. The important factor here is that it did not make a LL, thus trend is 'up' on the next higher degree.



The first small 123 and pullback short, is a good trade... but whenever we get near to a previous inflection point, it becomes more important to see if it gets broken for trend continuance, or the opposite, (this is a generalisation, of course).

On the next degree up again, the trend is still down, until the peak to the left is broken. So you see how important it is to match the timescale of the trade that you are planning on taking. If you look, we are actually just printing sideways action, after the fresh HH, which is why i say, that the small 123 and subsequent pullback, was good to go, but the LL followed by HH, always suggests caution. Wait for a trend to establish itself... (This is Harold's thread, so that is just my own opinion, of course!).

As an aside, in EW world, the channel to the left was clearly in 5w and that can not be a single set, together with the crossovers for wave B, (which means it was corrective), meant that a fresh high was the most likely course for wave C - in this instance it was 100% (equal to) wave A;

Morning, CG - you've been watching The DaVinci Code again, haven't you !?

Hey JT, haha! it seems that way, does it not?! you do not approve of such witchcraft?!

The numbers and letters are confusing to any non EW'er (non believers!), but in all honesty, there is some very simple basics at work;



5w to a fresh HH will not be a single set unless it is a 'C' wave (end of a corrective set), thus if you see the above, it will normally have a second set (as a minimum) to follow...

(OK OK, i will keep it to my own thread!)

Thank you.

I'm embarrassed to write, dear CG, that I didn't know you had one.... here it is everyone, LOTS of very interesting charts : http://www.forexfactory.com/showthread.php?t=582121

This is not my thread, but I do feel Harold made a great leap forward in the evolution of his FTTT thread with the present, very simple entry setup we have here - and as we see, for those new to it, there are often many questions required for clarification of just this simple entry setup combo (to include the 2B).

At the same time, I always think we over-focus on entries alone, when we need to address filtering trades (when there is a clear setup, but it makes sense not to take the trade), when to hold and when to fold. I understand that for some, Elliott Wave analysis is the important key here, but it can be a major distraction for those who choose not to use it.

And then again, without a steady emotional state whilst trading, we are unlikely to execute anything consistently : H's videos are an inspiring example of how one experienced trader addresses all of the above without getting flustered.

Indeed JT, i have long suggested that 2 people will never trade the same system in the exactly the same manner, for the very reason you just pointed out. The reason i stopped posting so much on the old flag trading the trend thread was simply because i had gone down the route of using EW to determine the 'safer' entries... but i appreciate that it makes no sense to post such on other's threads.

The interesting thing is that all i am doing is trading the pullback to the subwave (i) of each fractal set. This is exactly the same as Harold's method, just that i am zoomed in closer.

So Mr TD (above) might be relieved to read that i will again cease any input, but in actual fact, in reality, there is very little difference in methods.

The more important aspect, is indeed, how trading is approached in a psychological manner, of which, i think everyone would agree, Harold demonstrates perfectly.

I wrote the other day, that for me, it has been a huge personal struggle. If you are the kind of person, who in life will get wound up when something doesn't work and end up smashing said item to pieces.... this reflects in trading about how you are affected after a losing trade (and indeed vica versa, after a winner) - Despair vs Euphoria).

The ability to trade in a calm manner and rationalise each trade, whether good or bad equally, is essential to consistently winning... (imo!)
I totally agree that trading the retest of a Supply/Demand zone, has to be the simplest form of trading. No labels, or indicators req'd. Harold has simplified it and shows it for what it is.

I can not pretend that it has not been an influence on my own trading recently (for the better).

Excellent post JT.

And to add few points: How to take next trade after loss and manage it per your management rules and not get distracted because of loss. Sometimes one can get distracted after few good wins also. H is a great example. Just take the next one.

But I really understand why entries are so important for many. They give you context and clear way to start the trade. At first it's best to just take every entry and after a while go to the business of skipping some (I have been skipping longs at the absolute top of the day and shorts at the absolute bottom of the day).

And yes, you can't never manage trade perfectly, that's why rules are needed (Again, first rigid and after solid winning period you can become creative). I have been experimenting with some runners if I can take long from very bottom, but I am not sure yet, if runners really give anything special in the bigger context for me. I know the basic idea behind runners and stacking, but somehow just grabbing countless trades comes pretty near vs. having runners and it's much simpler than manage thos runners.

Also, one thing is that one should concentrate on raising the lotsize if one want's to get more money. Not adding new products or adding time for trading. It is a bit terrfiying, but after 2 lots it is coming a bit easier. No, I am not in 10 lot (yet). It took pretty long to get to two and now I need to make plan to go to 5. It would be pretty nice.

I can't see, why H couldn't trade 10 lot's or bigger.

And to add few points: How to take next trade after loss and manage it per your management rules and not get distracted because of loss. Sometimes one can get distracted after few good wins also.

Well, CG. if it makes you feel any better, the ONLY trader I know who has made millions trading fast (mainly tick) charts and also swing charts (mainly 60 min) - and excluding Ed Seykota, who I met on two occasions, who anyway trades off Dailies - started out about the same time as me (around the turn of the century !). He rented a small office space, essentially a small room, desk & chair with big 21" CRT monitors of the day (like a big old TV set).

As he continued to lose his (fairly large) initial starting capital during the first 18 months or so, complaints were made by others in the same building about the "trader who keeps using foul language" ! One day, after a particularly painful losing trade on the S&P 500 futures (in those days, $250/point), he lost it completely and kicked one of the monitors off his desk, sending it crashing - and smashing - to the floor, accompanied by a stream of expletives..... after which he was expelled from the building !!! It proved to be his turning point...

He ended up becoming what I can only describe as a trading machine : I tried to learn his method over a period of about 3 years, but I could never read a chart like he does. I even flew out to the US to spend a few days with him, to no ultimate avail. I could get his entries almost exactly, but it was his filtering and holding that made all the difference (and I should add that I had a handful of big months : +$17k being the largest - but mostly between +&- $2k, which gets draining after a while).

Edit : as I reread my post, I remember what he said to me when I left his group :

"The trouble with you, jtrade, is that you have never truly learned basic Support & Resistance"

If I had to say what is the single most important thing I focus on these days, it is Support & Resistance ...

Edit2 : & as I reread what I wrote above in my first Edit, I can tell you that it really hurts to do so... goddarn'it, it's taken me over a decade to start to take the basics clearly & seriously ...

Let me know when you get to 10, td .

I agree 100%.

This is also one of the reason that I think copying someone elses system at first as close as 1 to 1 as possible is a good starting point. Eventually everyone makes the system their own, while we all are different persons. I have some 14 and 20 range-bars there to help me (Harolds Range setups - halfway bars pullback, but won't post them here while they might confuse ppl) But for someone who is looking for constistency those are not needed, Just do as H does and continue from there. H's ability to scrap some and let some ride is the secret sauce and he can do it exceptionally well per his own method.

Let's see if it works or not. Of course I have ladders to the previous level if I make lot's of losses. Then I am back to 1 lot, can happen too!

By the way, I am trading YM, not NQ. I have been following YM so long and it somehow feels much more logical than NQ, so I trade that. YM is also a bit slower, which I like. Have to say that I am a bit amazed, while I have been a action junkie before regards trading.

My setups are usually combinations of H's vol setup and range bar halfway pullbacks and when they happen on "nice area" ie. not too much congestion.

Great story JT! Is he the "brick" guy? Do you know, what eventually happened after that raging phase. What did he discover in himself or markets?

Some stats for JT

Not very impressive, but consistent winning. These stats are from one month. One have to remember that be+1 counts as a win.

All trades Long Trades Short Trades
Total # of Trades 118 81 37
Percent Profitable 72,03 % 70,37 % 75,68 %
# of Winning Trades 85 57 28
# of Losing Trades 33 24 9
Profit Factor 2,64 2,63 2,67

Max. conseq. Winners 10 8 5
Max. conseq. Losers 3 3 2
Largest Winning Trade 0,16 % 0,16 % 0,13 %
Largest Losing Trade -0,07 % -0,07 % -0,06 %

# of Trades per Day 4,92 3,38 1,85
Avg. Time in Market 9,5 min 11,3 min 5,7 min

Shorts seem to be much faster and also giving slightly better hitrate. But, there are fewer shorts than longs.

So there is hope for me yet then JT?! haha!

You should see the pile of old PC's and monitors out in my back field, from where they lay after being hurled out of my 3rd floor windowhere. One day, the timeteam, will have a field day! )

I love this post! only because i can relate to it so clearly! I too started at the turn of the century. I started out buying Tech stocks from newspaper tips, right at the top of the dotcom bubble, lost a packet. Took a while to pay off the credit cards used for purchases. Came back a couple years later and bought oilers, racked up another tonne of losses... went away for another short period. Then started trading oil, thought i was clever, started shorting at around $100 on it's way to $147, (with no particular strategy), blew another account, then started buying it within a year at $60, on it's way to $37 (ish from memory), same result.

The relief to close the positions at several thousand $'s of losses, is difficult to explain, but that burning sensation, dissapating, at least allowing sleep to recommence, is quite some relief.

Bought a couple of smallcaps heavily on leverage during the crash, couldn't bring myself to short anything. Both co's went down the pan, taking everything i had ever worked for with it. I also started shorting the markets as it broke into the start of the current bullphase, recognised another heavy loss and then went Long into a little known flash crash, which took out another account with it!

You name a mistake to make and i've done it... several times over... Intelligence means little in the world of trading. Being calm & rational does, in my book... two things that i have short supply of!

As you say, yo-yo-ing can take it's toll, as can being discretional. The only way to beat all of the psychological problems, (imo) is to have a system that is mechanical - thus you take every entry that the chart prints.

For all those joining this thread and being relatively new to trading... i am jealous! Study everything that H does, over and over again and you will never have to experience these huge losses. The most you will suffer (in one go) is already predetermined, but get it right and within a very short time, you will be seeing your pot increase.

I'm with you JT on feeling like so much time has been wasted, when it feels like the S/R thing was here all along and is basically the key to trading. Join in with the big boys or lose! The big boys move markets and the proof is in the charts, notice a price reaction and ask why it happened? because a large buy (or sell) order was placed there and the likelyhood is that it did not completely fill (depending how big/how many contract orders were placed?), so wait for the revisit and join in... We can not know about these orders until the evidence is in the chart, so this is why trading the pullback is ultimately more sensible and most importantly, more successful.

I've observed two different types which i wrote about recently. The 'V' shape reaction, (low liquidity) and then the 'battlefield' type where a series of bars will go no-where. Fights between bulls and bears.

Everything is relevant to the timescale that you are viewing... A 'V' on one timescale will be a 'battlefield on a much smaller timescale and vica versa.

From last weeks YM;

Wrong, td, VERY impressive : well done !

Keep it up and you'll be at a 10 lot sooner than me

slow day: