What Happens When A Stock Is Added To The S&P 3 Solid Techniques for NQ Trade Entries

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3 Solid Techniques for NQ Trade Entries

The Nasdaq futures contract ( NQ ) trades normally like most other stock indexes, although it has a few twists that make it stand out from the crowd. For anyone who has traded seriously, it is these “turns” that can cause problems for the uninitiated when trading NQ. The purpose of this article is to alert traders to some of the features of NQ trading and how to set up your trade to take advantage of the attractive parts of the contract and avoid some of the less than pleasant outcomes of this instrument. can cause.

There are times when this contract is very easy to trade, especially when it is trending. Sure, you could say that all contracts are easy to trade in the trend, but NQ (due to volatility) presents some unique challenges and can be profitable if you trade the contract correctly. The challenge when trading NQ is to understand the volatile nature of the contract and profit from it. This can be a double edged sword, the flip side of volatility is the tendency for price action to move against your position at high speed.

In a normal bracketed market, you can let the trade go against you depending on the size of your trading account, but sooner or later (it could be days, weeks, even months) the price action will explode and you will let the trade go. will become your worst nightmare. The best general approach is to trade this contract conservatively and with the trend in mind.

Trading against trends is the formula for falling trading accounts on NQ. You should repeat this mantra 25 times every night before going to bed. “I won’t trade against the trend, I won’t trade against the trend…”

Here are the methods that have been successful for me in trading on the Nasdaq:

· Reversion to the mean: Like most contracts, the Nasdaq is a great contract to trade using a technique called Mean Reversion. This strategy, in general, prevents traders from making those terrible breakout and breakout trades that are so often the cause of many losses. I usually wait until the price action is 2 to 3 standard deviations from the tested SMA and consider this trade phenomenally successful. I added some game changing rules to define the trade more precisely and increased the win percentage by another 15%. I encourage you to explore this not very popular trading style and see how successful it can truly be.

· Pay special attention to support and resistance (SAR): As I mentioned at the beginning, NQ is a very active contract and making any preconceived assumptions about whether the price will move through the SAR is a mistake. A better idea would be to use an order flow program so you can see the actual order flow in SAR. Are traders on the buy side, on the sell side, or are orders placed representing traders on both the bid and ask levels.

· Analysis of volumes: Most traders now understand that increasing volume in the SAR usually causes the market to pull back from the SAR. The bottom line is also valid: low volume approaching the SAR may indicate that price will continue through support/resistance. I highly recommend using the Best Volume indicator to show the character of each bar in real time. Obviously, a high volume in SAR often indicates that there may be a change in direction on the charts, while a low volume signals a possible continuation of the movement. The question has always been, “How loud does the volume have to be to indicate the reverse direction?” Obviously, a high volume in SAR often indicates that there may be a change in direction on the charts, while a low volume signals a possible continuation of the movement. The question has always been, “How loud does the volume have to be to indicate the reverse direction?”

Is there a way to find the “perfect” NQ entry point? No, not really. But you can become good enough to read between the lines and consistently score winners. Good luck in the trade.

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