NQ Price action – wtf is happening?

Discussion in 'Index Futures' started by KiwiRoo, Jul 16, 2008.

  1. KiwiRoo


    I’m not sure if it’s just me or what, but in the recent trading sessions, I have found the NQ to be quite impossible to trade without increasing my stop size? My stops are usually 8-10ticks but unless it’s now spot on, it will get blown through in no time.

    As for support and resistance, how much room do I really need to give it now? After breaking through the S/R level, I keep getting an in your face reversal back to the other side of the island. I guess the only good thing left now is, when it comes to the really big move, NQ is still quite explosive – the question is, how and when to catch them.

    So, is this just me or the market has attracted more traders that are placing random trades? On that note, I am seeing on the T&S that 1-2 lot car size traders can move the market 3-4 points? Am I missing something? How the feck do I hold my trades now when I keep getting slap around? How do you do it?
  2. greddy


    How about using a volume based chart and look
    for a time frame that makes it easy to identify waves?

    I find the NQ choppy most of the time, but there are
    moments when it moves in smooth waves that a
    good trader will be able to make some decent money.
    Trading in non trending chop will chop you up.

    I was doing ok in May and June. Things went downhill
    in July as I got rid of the MACD since many purists think
    indicators are evil.

    I realized that each trader is different, so back goes the MACD
    to aid in entries. Price action will always be 90% of the analysis,

    Hope that helps.
  3. Look at the $vxn in the past week. It is a must to pay attention to market volatility sentiment when trading futures. You can't trade with hard stops in this environment. Learn to adjust your trading according to the sentiment of volatility. It's not just the NQ, it's ES, YM, ER2 also. As a trader, if you want to make money at this, there are certain things you have to pay attention to.
  4. you could try to adjust your stop size to local volatility (sigma or ATR for past n days). Additionally, you could lower risk size to handle the increased draw-down magnitudes
    over the volatile period.
  5. KiwiRoo


    Thanks for the replies guys….

    I am currently using 350 CV for my entry chart, I know it’s pretty fast but anything bigger than that, the bar just doesn’t quite make sense. For the 350 CV, I see a lot of 2-3 points full bar without any follow through. The volume on DOM is so light, after a price spike, its probably more profitable to take a quick scalp in the opposite direction after the price pauses!! You are right, the past couple of months were fine, but starting this month, things just gets too wild!!

    As far as $VXN and ATR, I’m not very sure how helpful it could be for a scalper type traders like myself. It makes sense for swing traders to note of these types of indicators but for scalping, I’m not seeing the light. Please share your thought?
  6. Xuanxue


    Multiples of a weighted average true range are used in position and swing trading to account for retracements. If you're scalping then multiples aren't a concern. What is however is your toleration levels for risk and pain concerning hard stops. If your timing isn't impeccable, I wouldn't trade the chop live until it is.

    True range is the largest value found by solving the following three equations:

    1. TR = H – L
    2. TR = H – C.1
    3. TR = C.1 – L

    TR represents the true range
    H represents today's high
    L represents today's low
    C.1 represents yesterday's close

    Today's Exponential Moving Average (or Average True Range)=(current day's closing price (or trading range) x Exponent) + (previous day's EMA (or ATR) x (1-Exponent)).

    How do you find the exponent? First you require the current data from a previous average, be it an SMA or EMA; you then need to determine how many periods you want to mean weight, then add 1 to the period range, and divide the total by 2. So for a 200 period exponent you'ld have .0099502, and not 100. Then you round to get .01.

    You'll find a 13 period ATR quite sufficient for intraday swing or scalp trading.