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I have my initial stop set at 40 ticks on NQ. Like you said, the swings it does on normal days will kill a small stop. Days like today are a really good example. Several good moves that didn't need a big stop but many moves that did. I let ninjatrader set the initial stop then I move it to where it really needs to go. Much faster than adding a stop later.
Great video, BTW. A 2 range bar on NQ makes for some rapid chart movement. Have you done any testing with larger ranges?
Good ideas on the stop.. Yes, I use the 2 range mainly for timing entries while also watching higher timeframes. The 2 range chart with the Logical Forex indicators is just something I have watched for about 7 years and it really let's me process the immediate market conditions. I have used larger range charts such as 4 or 6 range, but they don't work as well for that particular chart I use. As much as I generally use higher timeframes for confirmation, sometimes they will lag when a new sudden explosive move shows up. So sometimes I will trade a fresh move before a higher timeframe gives a signal. It just comes down to what I think is happening in "real time."
Of course, on NQ, it's easy to get the direction wrong and the swings can be murderous.
40 ticks is a good initial stop..and then..as you say, you can quickly reduce that according to market structure.
I've recently changed my average t/p to 40 ticks and it seems like a reasonable s/l is 2 ticks below the signal bar ( average signal bar is 6-12 ticks ) I know today I ended up leaving two trades at the ATM of 9 ticks and got stopped out only to have the market move up 40+ ticks. Still experimenting with this but today up until about 11 if you bought every pull back and put the s/l below the signal bar ( bullish engulfing/dominate bull bar ect) you would of only had 1 losing trade and that was during the 1030 ish chop area.
Definitely some good shots just after the open today. Unfortunately I loaded blanks into the gun today (Sim trading). Trying to cure a bad case of stupid. LOL!
I usually don't set a target. I keep moving the stop and let the market show me where to get out. About the only time I will use a target is when I am scalping.
There are always days and situations where if one had impeccable timing and the market was moving a certain way..14 tick stops would work. However, I highly doubt that virtually anyone could consistently and successfully Live trade NQ using less than 20 tick stops. I base that on my experiences and observations with NQ over several years.
I agree but a lot of what I am looking for are momentum plays with the trend and if we retrace 5 pts for the entry then it seems like a decent amount of time we go into a draw down period/range before moving up. Now is this the case every time nope.. but it seems like it is a lot of the time and if I have to have a 1:1 R:R I could probably have entered at a better spot so my s/l isn't so big. Trying to keep losses at a minimum to protect my capital and my mental capital. Mentally I can deal with 10 9 tick stops but 1 90 tick stop messes with me a little bit.
I understand your point, but 10 tick stops on NQ are extremely tight. Even in strong momentum moves Nq can move backwards 10 ticks in less than a few seconds. 20 tick stops are $100, due to the $5 per tick value. That is similar to a 10 tick stopout on Crude Oil .
If you can trade NQ live successfully over time with a 10 tick stop, then you have tremendous skills. I happen to think 10 tick stop losses on NQ would be account suicide in the long run.
What I posted was I normally put my s/l under the signal candle which for me is normally 6-12 ticks on average. have there been times when I move my stop loss to 20 + ticks.. of course but for me it seems like most trades/entries respect having the s/l under the signal candle. I don't enter off S/R levels only I need to see something happen first and this seems to help with getting faked out and having a 20 tick s/l. Now I do normally miss out on a pt or two but I am looking for a chunk in the middle.. calling tops and bottoms is not something I have been able to do successfully over time.
but I do agree with you sometimes the market pulls back 5pts before moving up and if it does then I'd just re-enter.
what works for me might not work for everyone else
Thank you for the video Lance. You pretty much described everything I do. Switching back and forth, letting myself get distracted when things are slow ect...
Very grateful for all that I've learned from you throughout the years. You are my first teacher. Good luck tomorrow and sleep well.
