Trading the NQ

This is a discussion on Trading the NQ within the Trading Journals forums, part of the Reception category; The chief drivers of the "Trump Rally" have been the prospect of tax cuts and deregulation. If traders are disappointed ...

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Old Mar 21, 2017, 4:37pm   #41
 
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dbphoenix started this thread The chief drivers of the "Trump Rally" have been the prospect of tax cuts and deregulation. If traders are disappointed in the progress toward either of these goals, there's no reason for anybody to buy, or at least buy further, particularly given that valuations are so high. Not that anyone needs to know any of this in order to trade the SLA. But it does provide context, and it does alert the trader to be on the lookout for signs of failure. We barely exited the trend channel and are now well back into it and at the moment are below the last swing low.
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Old Mar 24, 2017, 4:01pm   #42
 
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W: Price around OB

D: DL break. Price heading towards potential R of TR. The last attempt above this TR top didn't go well as the continuation failed due to demand pulling out at previous swing high dropping the price down and back into the TR. Now it's in RET mode. There are two modes to consider. Using SLA price is retracing after break of the demand line, and there's also the horizontal AMT at play at the top of TR. Usually a combination of these two and at a weekly overbought area is reason enough to limit snoozing to minimal.

H: Price heading towards the TR top.

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Old Mar 24, 2017, 7:11pm   #43
 
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D: DL break.
Actually you've had three DL breaks, the first two of which would have been stopped out. Therefore, you'll benefit by deciding which DLs are going to be important enough for you to use as trade triggers. You may have an easier time of this by eliminating all those lines except perhaps for the DLs.
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Old Mar 24, 2017, 7:53pm   #44
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Actually you've had three DL breaks, the first two of which would have been stopped out. Therefore, you'll benefit by deciding which DLs are going to be important enough for you to use as trade triggers. You may have an easier time of this by eliminating all those lines except perhaps for the DLs.
...which leads me to this situation- if one tightened up their daily DL because price has started ascending at a steeper rate, we would now have 2 DLs and a decision to make. At the break of the tighter DL, do we take the short (after RET) knowing there is the original DL is looming, do we defer to the original DL for our next move ....OR (my guess) do we assume the original DL will be resistance and only take the short if the margin is wide enough?
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Old Mar 24, 2017, 8:27pm   #45
 
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dbphoenix started this thread It is assumed that the trader draws the tighter DL because he intends to trade it. Otherwise, there's no point in drawing it. If he instead plans to wait for a break of the previous DL, then whatever questions there may be about the tighter DL aren't pertinent. The trader might also have decided that he will wait for a break of the last swing low, but doing so means taking additional price risk since price will by then be lower than it would have been at the first entry.

Clearly the SLA trader has to do a little self-examination, at the very least what do I want and what am I willing to do to get it?
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Old Mar 24, 2017, 8:30pm   #46
 
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The clean version. We almost had a daily short but a no-go.

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Old Mar 24, 2017, 8:33pm   #47
 
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The clean version. We almost had a daily short but a no-go.
The dark blue lines aren't necessary unless you're waiting for a RET confirmation before going long. There are obvious advantages to waiting for this confirmation, but of course doing so places one even farther away from the DP. Again, what do I want and what am I willing to do to get it?
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Old Mar 24, 2017, 9:23pm   #48
 
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2 cents.

FWIW I'm not so much an interday trader, but I still keep tabs on what is happening on the higher time frames as part of planning my day ahead (slightly different daily than whats been posted).

As far as the DL's go, a tighter DL at a known trading opportunity (the UL of the trending range) would give a trader an early entry as one would want to get in as close as possible to the upper limit, but, at a time where the behaviour has changed enough to suggest a move away is the most probable scenario.

The blue DL on the daily has been broken by Tuesdays drop, this drop was halted at the red DL price is currently retracing and a short is on the cards, if one waits for the red DL to break and ret if it rets at all, price will be getting further and further from the UL, the risk is going up and the reward is going down. If the trade does not work it doesn't work, the trader should have controls in place to keep losses small.

Price has been sitting around the MP of the drop and the move above has not been sustained, possible indication of future weakness as the weekly and daily LOLR assert themselves.

Take the opportunities as they present themselves and control the risk, sometimes easier said than done.
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