I'm not sure I understand the question, coz what's visible to me is that there were quite a few movements on NQ (on 5 min chart, that is. I look at the 5min after 930am EST. Before that, I look only at the 30min chart) on Sep 26.
I've highlighted the movements in green on my 5min chart (click on chart to see enlarged version):
Depending on the timeframe we're looking at, the market can be seen to be making directional or sideway movements.
On the 5 min chart above, NQ is visibly going sideways during the 10:00 to 12:00 period.
That said, if you're just scalping, you'll still be able to get something if you lower your profit target.
I'm going to talk a little about the sideway move from 1000 to 1230:- As I mentioned above, if I choose to scalp even a sideway move (I'll play a ranging market if the range is not too narrow), I can still get something from this time frame (which I often do for ER2 before it was ICED).
- In the case of Sep 26, however, I wouldn't trade the downmove at 1000 coz I don't like to trade what looks like retracement to me (
since NQ has been on an upward move until 1000, I will assume that its first move downwards is a retracement).
- I'll watch the retracement and see what happens next.
- If NQ were to continue to go up after the correction, I'll presume that the uptrend is still intact.
- What I'll do next is to look for the 1st resistance. If the closes resistance is the resistance that
I've identified on my 30 min chart before market open, and is not far away from the current price, that will tell me that the upward move is probably going to be limited.
- If indeed NQ doesn't break out of this resistance, I'll assume that NQ will start trading in a range for a while,
especially if it's around the 11am to 2pm window.
- I'll usually NOT scalp this range, unless I'm really desperate (like if I've had losing trades before that and I'm looking to offset those losses).
- During this period that it's ranging, I'll watch NQ's movement to see if it is gathering momentum to PLUNGE (refering specifically to Sep 26's movement only).
- If NQ has attempted to hit the highest reistance (Navy blue line on my chart) and fail to break up, i'll be more confident of trading down after 2pm.
- If NQ starts to make lower highs and lower lows during this ranging period, and has never once gone up to the highest resistance to test it, I'll be more cautious and maybe even hesitant to make a move after 2pm - because I'll be expecting NQ to make an attempt to test the highest resistance after that.
And that was exactly what happened with the trade I took at 2pm (shaded in blue - the 2nd blue rectangle). - I got out at around 1661 although my initial target was 1656, because I wasn't sure that NQ was going to plunge, given that it's not tested 1668 (the highest resistance in navy blue line).
- Had NQ been less hesitant when it was coming down from 1663, I would have held on to my trade and wait for it to hit my profit target of 1656.
But because:1) the move was not decidedly downwards,
2) the debate between the 2 parties going on (
something I notice is that it really doesn't matter what the senators say, I was watching DOW as the 2 senators took turn to speak, and DOW has gone up and also down for each, and the contents of their speech has created no significant movement in DOW, which tells me that market sentiment takes precedence over real-time new info and data. That said, I still don't like to stay in a trade when key events like these are taking place)
3) NQ has not tested 1668 resistance
I closed my position at the point that's half of what I initially wanted to take.Of course, as fate would have it
(always!!), NQ indeed went down to 1656, where I had place my initial profit target.
Now, if you look at the 2 green rectangles that I've drawn (the ones that are separated by my blue rectangle), combine the 2, and you will see a big move downwards there.
At 3pm, a morning star (well, not exactly a morning star strictly speaking, which is just a name to me, it's the market psychology underpinning the pattern that I'm paying more attention to) formed (in grey circle).
Morning stars at swing lows are usually reliable in foretelling a significant move UP.
NQ indeed went on to hit a high higher than 1678 after that.
I want to talk a little about NEWS at this point:The news that accompanied the move up were not particular bullish, in my opinion. Some would disagree, coz the indices were going up, and since there MUST BE A REASON that they were going up, it's gotta be news.
My take regarding NEWS: - I've sat through sessions just staring at my charts and listening to news, and noticed that more often than not, the charts basically do what they want to do, totally ignoring news (and it was precisely after I've seen it with my own eyes that I finally was able to appreciate this wise saying:
"the market is always right and always tells its own story best").
- What I see in the news and commentaries post-event, that made reference to a particular event and then associate it with the moves - they make me laugh at best.
- What move the market is GENERAL SENTIMENTS that could last anywhere from days to weeks to months, sometimes lasting maybe just hours (e.g when an ultra significant event overshadows all the rest before it).
Coming back to the upward move from 3pm on - that move from 1650 to 1684 - that would, in my opinion - especially with my position size - be a BIG MOVE.
So to sum up, for the session on Sep 26
, you have (NOT taking into account the smaller moves during the 1000 to 1230 timeframe)
4 big upward moves and
3 downward moves They are all highlighted in green in my chart above. Now these are in hindsight of course.
In real-time,
- I wouldn't have taken the trade up (2nd green rectangle), because I would assume that it's a retracement (downward trend before that).
- By the time I realize it's not, it would have been too late (look at the size of that bullish candle).
- I wouldn't have taken the upward move that followed either, coz there were just too many resistances on its way up and I wouldn't know for sure when it will be stopped by one of them and turned back down.
- The long upper shadows are effective deterrents too.
- But most importantly, although I want to be bullish (and why shouldn't anyone, given that the entire government WANTS market to go up?), I simply can't be coz the patterns of the bullish candles suggest more short covering / profit taking than optimistic buying.
- And this is my personal rule: in a market filled with uncertainty and gloom, to make me go long, I'll have to see
hammerS (yes, I'll need to see more than 1, coz I don't want to go through the wash and rinse cycle) at
SWING lOWS. The upmove in the 2 said green rectangle were NOT supported by hammers. Hence, no play for me.
Although the 2 upward moves after 1230pm EST were supported by hammers and a morning star respectively, I didn't take anyone of them because:
- the first move up after 1230pm EST happened to be in the window that I don't open a new trade (11am- 1230pm). Too many bad experiences with and sob stories to tell about this trading timeframe!!
- the 2nd move happened after 3pm EST, after I've taken my 1400 over "profit", and time for me to pause and regroup. The morning star was very tempting of course, but I don't like to chase. I'm usually very high-strung when I'm in a trade - so once i close a position with profit, I usually need some time to cool down.
- On occasions where I've taken trades after 3pm - those were usually days when I hadn't hit my profit target for the day, or, days that I saw a pattern that I was familiar with - and these patterns are bearish (
yes I'm a bear still, coz the market is apparently still bearish. Until the market decides that there's no harm being slightly LESS BEARISH since external intervention will surely IMPEDE further moves down, I'll continue to be VERY BEARISH ie. no longing)
Just want to talk a little about
the trade I took before 930am EST. - As shown in my chart, the blue rectangle (which shows the points I gained in the short entry) is about a quarter of the overall plunge down (Now, this is one hell of a move for me - for a 10 contract size, that's $5400 in profit).
- That would be what I call my
DREAM profit target.
- Usually, I'll take profit at nearest support first, then continue to scalp it downwards until there're signs of exhaustion of prevailing trend.
On Sep 26, I hadn't entered again after my trade hit its target coz:1) it was not real-money trade, my main focus was on observing what NQ does throughout the trading session esp during the first half hour of market open
2) my feeling about the market that day is that it's not decidedly bearish, so i'll have reservation about NQ's continual move down. I actually expected some short coverings first (ie. testing resistances - the pink, brown and green lines on my chart) before plunging.
As for the other moves that I could have taken down but did not, especially the ones from the top, I've explained in my posting on which
gmargtrader's comment was made, why I hadn't taken them.
Long answer for a short (but not simple, coz I still am not sure if I got it) question.
My apologies if I confuse anyone.
But it's my journal, and as long as it doesn't confuse me, I'm happy :-D
