Trading QQQ ?

Discussion in 'Trading' started by HawaiianTrader, Jan 27, 2001.

  1. Hi Everyone,

    I thought I had a nice system set up for trading QQQ. I'd watch the Nasdaq Comp on a one minite chart, using two MA's crossing over as an entry and exit of each trade, I'd then use a 3MA on QQQ (1 minite) for a limit price to be paid, not too much, or too little, ha !!

    What I found is that I wouldn't get filled even watching prices going through at that level, plus when changing/canceling orders, he's just hold it. Needless to say I just got trashed.

    Would market orders have worked better ? Or should I just stay away from QQQ (and other NYSE stocks) ? Talk about frustrating, as usual nothing is worse to find a system that appears to work good on paper, but in the real world flys like a lead ballon :-(

    I usually try to use support and resistance on other stocks(Nasdaq), but would really like to use a simple "mechanical" daytrading system with set entry and exit points to keep out my emotions, any answers ? Right now I'm looking for a living, the Porsche can wait :)

    As usual thanks for everyones help.
  2. The specialist has the right to hold a market order for 2 minutes before exercising. It needs to be calculated into your trading style. I'd suggest a slightly longer timeframe.

    Robert Tharp
  3. FYI, you can trade the QQQ's through island.
  4. trade them through island, but don't expect great fills. Unfortunately, everyone else probably sees what you do too. I would go with market orders. Normally they are the fastest. BUt i have just learned not to trade qqq. Some specialists are generous. THis one isn't. There are some stocks that just can't be traded.Instead, try trading the emini it is much more liquid, and the spread is never more than .5
  5. For trading the Q's, I use a 5S/8E MA crossoversystem on a 3 minute chart, together with a 15,5,5 Stochastic, watching NDX & T&S and TP's S&R calculations.

    As with all systems, it works not always, but most of the time.

    For position-trading, try to use the 5 / 8 MA's on a 30 minute or even 60 minute chart. Again, 15,5,5, Stochastic crossing up 20 is a good entry signal, especially, when combined with the MA crossovers and S & R levels.

    QQQ's are used for hedging and arbitrage trading by major
    institutionals in huge volumes - that's why the trading volumes have grown tremendously during 2000.
    So watch out for program-trading triggered breakouts ( up & down ) if you find discrepancies between NDX futures / S&P futures and Q's or at major S&R levels.

    The Q's should track the NDX by 1/40 ( roughly ) in price.

    However, as with many Index-tracking shares or baskets, the Q's have their own supply & demand rules. So it happens ( quite often ), that their current trading-price is over or undervalued compared with NDX.
    If you use QCharts for RT quotes, try to use the Level 2 window.
    Although the Q's are traded at the Amex, they trade also ( and in large blocks ) on other exchanges ( i.e. Boston, Phil., etc. ).
    You can gauge the depth of the current market for the Q's by using "Level 2" window
    ( same works for most other NYSE or Amex Stocks ).
    Don't know, whether other RT quote vendors offer this option.

    Again, for trading decisions, it is useful to have at least a look at the put/call ratio, unusual options activities and changes in IV in Q's options.
    Please be aware, that options-pricing is often re- calculated after the close on Fridays.
    So changes in IV might affect the options-price by following monday.

    Hope this helps a bit.

  6. eltr


    I am a new stock trader, could you explain more detail about the numbers you used in your message. What are 5S/8E, 15,5,5 Stochastic.

    BTW, what is TP's S$R?

  7. Hi eltr

    check your e-mail.

  8. Thank you all for the info'. As usual just great education, no wounder this site is at the top of my favorites list :)