Trade Review, CPI & Trading Strategy, Tuesday's trading plan
Buckle up folks!
What’s going on? Everyone had a great day? I guess you guys missed my daily market updates, as I received quite a few emails over the weekend and today asking why there was no newsletter. Even though I was a bit lazy to write today, we’re back!! I didn’t plan to trade today, but in the end, this low-volatility environment is an excellent place to practice and test new things.
In today’s newsletter, we’ll go through today’s action (on $NQ, for my new followers), review my trades, discuss what’s brewing, and give a little bonus on Python programming for those who don’t follow me on Twitter (@itsonlymoney12).
It’d mean a lot if you could like and share this article with a friend.
What a *fun* trading day. Let’s jump right into the action. We opened last Sunday night pretty flat, and prices spent some time right below Friday’s 30min OR low at 11,667. This level has been one of the most important throughout the whole day. Prices rallied 100 points overnight in a straight line (you can see it better on a range chart rather than candlesticks). Prices stopped *drum* at around Friday’s 30min middle OR, with a nice double top, driving prices to revisit that 11,667 level.
If you don’t like noise, like me, I invite you to try the range chart rather than candlesticks. I can see moves with this view much more clearly. I still keep a 15-minute and 4H chart on the left to ensure I don’t get lost in the moment.
Trade review
I don’t mind sharing today’s trades because it’s a fairly known/popular setup, and I know most people are not patient enough to take advantage of it anyway.
When we revisited the 11,667 area at 10:55 am, we could either nuke or reintegrate the range. I thought the second option was most likely. Why?
It’s a low-volatility day (news tomorrow)
Clear range defined at the moment I entered
Exhaustion of sellers (delta)
Good risk-reward ratio
When prices didn’t nuke right after that large negative delta following the break of today’s low 30min OR, I quickly acted and entered long. I added more on the pullback at 11,691 (30min middle OR), targetting the stops above 11,740 (LVN).
We never know what’s about to happen; we can only take action based on our plan.
If you struggle to see that pattern in the above chart, I created this visual to help you. On the left is theory, and on the right is today’s execution.
We build some volume around the 30min OR High during the afternoon, and a breakout could occur during power hour. However, $NQ was in a hurry, and we broke that 11,725 level and +3 std VWAP with strengths to reach 11,791ish, corresponding to a nice shelf on Friday-Monday’s VP. If you can pull your chart, you’ll see a significant negative delta which was a perfect short-entry signal. I took the short for a small loss, no ragrats.
We closed around 11,820 after briefly visiting last Friday’s HoD. It’s pretty uncommon to close around the +3 std VWAP, and I don’t have a lot of data about it, so I’ll add it to my list of homework for the coming weeks.
Overall, it was a very clean day; I’m happy with my planning, execution, and mental calm. It almost felt effortless.
The most important section of this newsletter. A bunch of important news is coming this week, from Tuesday to Friday. I reduced my leverage for this week to 3-10MNQ. There will be crazy moves, and I wouldn’t be surprised to have a 10% range on $NQ this week. Can you handle 800-1000 moves without blowing your account? If the answer is no, turn off the screens, and come back next week fresh. No harm in that. I wish I had done that during my first 6-7 years.
Aaron, I don’t know if you read me, but thanks for your economic calendar! Guys, Aaron is a great trader (and human), give him a follow, and you’ll learn great skills from him.
You know the drills… News day = fewer levels. Prices will most likely go crazy, and there’s no point in me having levels all over the place. Either I can get a great entry, or I don’t trade. Remember that even if I share levels, how prices react to levels is what matters.
The red area is the danger area. It’s the range we’ve been stuck in for weeks now. Ideally, I want one of these levels to see a false breakout and enter the retest. My favorite scenario is that we won’t break outside this range on the next tentative.
Today’s bonus: my thread on Python and how to start your journey with a concrete example. Give it a go :)
If you’re looking to follow a talented programmer and kind human, check out Ryan, a great guy!
Good *luck* for the rest of the week.
Thank you.
- Retail
Useful links
📝Previous articles: read here
Twitter: @itsonlymoney12
📩 retailcapital9@gmail.com
Great update from you again!
Stole those two pictures with balance day and with table. Ill try to remade table for myself.
Thank you!