Nasdaq February Monthly Review – Contin.
Refer to the previous post regarding Feb Monthly Analysis for part 1 of this post.
So as promised, here is the detailed analysis of each of the Feb month’s entries, marked with number’s on the chart:
Trade 1:
Entry Point: 17254
Time of entry (GMT): +-8h30
Confirmations:
Market Pattern: DB formed on 1H TF with neckline broken. Also on the 31 Jan, price had travelled down more than the distance equal to the height of the day DT that had formed (marked in blue lines). From profit target (end point of the blue vertical line), probability is high that market will move back to retest the neckline of the market pattern. I like being part of a retest that is in the same direction as the overall trend
Fib: The Day candle on 31 January had closed with a spike down to the Day 0,50 fib level (fib drawn from swing low at A. to swing high at B.). Day fib levels are strong and a DB forming in the area of the D 0,50 fib level is a strong entry signal
Candlesticks: 31 Jan Day candle closed with a longish spike down to the D 0,50 fib + D EMA
S&R: Strong dynamic support provided by the D EMA
Trend lines: The trend is your friend - taking a buy in a bullish market will always get you the most pips because rallies can often run for longer than you expect (buy the dip)
Stop loss: Half the height of the DB i.e.. At 17175,9
Draw Down pips: 754 pips
TP points: TP1 = 17963 (fib level -0,27)
TP2 = 18348,8 (fib level -0,618)
Fib drawn from swing low at A. to swing high at B.)
Both TPs hit
Close half your position at TP1 and the other half at TP2
Profit in pips: 10’943
Comments: Successful trade
---------------------------------------------------------------------------------------------
Trade 2:
Entry Point: 17607
Time of entry (GMT): 21h00
Confirmations:
Market Pattern: Db formed on the 15min TF, with strong momentum candle breaking the neckline.
Fib: DB formed by the Day 0,618 fib level (fib drawn from swing low at C. to swing high at D.) 0,618 fib levels are very strong especially on the D TF
Candlesticks: On the 15min TF, there is a long wick hammer candle right by the D 0,618 fib level + strong momentum green candles on the 15min TF to break the neckline of the DB.
S&R: DB formed by a strong Day S&R zone + D EMA right by this zone providing dynamic support
Trend lines: The trend is your friend - taking a buy in a bullish market will always get you the most pips because rallies can often run for longer than you expect
Stop loss: Half the height of the DB i.e. At 17531
Draw Down pips: 137 pips
TP points: TP1 = 18293,2 (fib level -0,27)
TP2 = 18617 (fib level -0,618)
(Fib drawn from swing low at C. to swing high at D.)
Plan is to close half your position at TP1 and the other half at TP2
Profit in pips: zero
Comments: This trade did not work out - ultimately price came down and took the trade out at entry - Market moved up 3504 pips from entry
--------------------------------------------------------------------------------------------
Trade 3:
Entry Point: 17364
Time of entry (GMT): 20h30
Confirmations:
Market Pattern: A huge DT formed on the D TF with a break of the neckline (neckline and profit target (ie same distance as height of market pattern) marked in orange lines). Price travelled the full distance of the profit target. End of profit target (end of the orange vertical line coincides perfectly with Week 0,382 fib level). Market has a high probability of retesting the neckline of the market pattern after reaching the profit target. I like being part of a retest that is in the same direction as the overall trend. DB formed on the 15min TF at this level with a break of the neckline.
Fib: 15min DB formed right at the W 0,382 fib level
Candlesticks: None
S&R: Strong Day support level + 4H 200 EMA
Trend lines: The trend is your friend - taking a buy in a bullish market will always get you the most pips because rallies can often run for longer than you expect
Stop loss: Half the height of the DB ie. At 17333
Draw Down pips: zero
TP points: TP1 = 18542 (fib level -0,27)
TP2 = 19189 (fib level -0,618)
Fib drawn from swing low at E. to swing high at D.
Plan is to close half your position at TP1 and the other half at TP2
Profit in pips: still in progress
Comments: Trade still in progress - market has moved 10'923 pips from entry
-----------------------------------------------------------------------------------------------
Trade 4:
Entry Point: 17834,6
Time of entry (GMT): 13h30
Confirmations:
Market Pattern: DB formed on 30min TF right at the W 0,382 fib level + D 0,382 fib level. Enter at break of the neckline.
Fib: Area of confluence because Week and Day 0,382 fib levels coincide
Candlesticks: Long wick candle close on 30min TF piercing both the Fib levels but closing above
S&R: 4H support level + D EMA providing dynamic support
Trend lines: The trend is your friend - taking a buy in a bullish market will always get you the most pips because rallies can often run for longer than you expect
Stop loss: Half the height of the DB i.e. At 17825
Draw Down pips: 130 pips
TP points: TP1 = 18307,5 (fib level -0,27)
TP2 = 18581 (fib level -0,618)
Fib drawn from swing low at 3. to swing high at F.
Plan is to close half your position at TP1 and the other half at TP2
Profit in pips: TP1 hit + TP2 in progress
Comments: Tp1 hit at 4748 pips above entry
-----------------------------------------------------------------------------
If you had taken these trades, you would have closed out on 15'691 pips of profit.
Always easier to pinpoint entries in hindsight - but the point of this exercise is to understand these entries and understand why you didn’t take them. This will connect the dots in your brain and then in future, you have a higher chance of spotting these high-quality entries and actually taking them.
Looking at the chart above, one can clearly see the trending market i.e. the market runs and pulls back…runs and pulls back. So you want to get in on the trend at the pull back (at retracement levels).
These are not the only high-quality entries - there were some good sells with the break of the DT necklines (marked in black lines).
But these are sells in a bullish market, so your TP's will never run as far as buys in a bullish market.
A note about stop losses on Nasdaq – my advice is not to set actual stop losses on MT4 or MT5 for your trades because Nasdaq is so volatile that it can often spike you out. Unfortunately, you need to use mental stops and use judgement with stop losses and see how candles CLOSE, not how candles spike.
Once price has moved a significant distance away from your position, you can secure at entry and trade risk free.
Screen time with this index will help you get the "feel" of this
I learnt from this analysis and hope you did too 😊
All the best for March month trading!
TF = timeframe
TP = take profit
1H = 1 hour
4H = 4 hour
D = day
W = week
M = month
S&R = support & resistance
EMA = Exponential moving average
DT = Double Top
DB = Double Bottom
So as promised, here is the detailed analysis of each of the Feb month’s entries, marked with number’s on the chart:
Trade 1:
Entry Point: 17254
Time of entry (GMT): +-8h30
Confirmations:
Market Pattern: DB formed on 1H TF with neckline broken. Also on the 31 Jan, price had travelled down more than the distance equal to the height of the day DT that had formed (marked in blue lines). From profit target (end point of the blue vertical line), probability is high that market will move back to retest the neckline of the market pattern. I like being part of a retest that is in the same direction as the overall trend
Fib: The Day candle on 31 January had closed with a spike down to the Day 0,50 fib level (fib drawn from swing low at A. to swing high at B.). Day fib levels are strong and a DB forming in the area of the D 0,50 fib level is a strong entry signal
Candlesticks: 31 Jan Day candle closed with a longish spike down to the D 0,50 fib + D EMA
S&R: Strong dynamic support provided by the D EMA
Trend lines: The trend is your friend - taking a buy in a bullish market will always get you the most pips because rallies can often run for longer than you expect (buy the dip)
Stop loss: Half the height of the DB i.e.. At 17175,9
Draw Down pips: 754 pips
TP points: TP1 = 17963 (fib level -0,27)
TP2 = 18348,8 (fib level -0,618)
Fib drawn from swing low at A. to swing high at B.)
Both TPs hit
Close half your position at TP1 and the other half at TP2
Profit in pips: 10’943
Comments: Successful trade
---------------------------------------------------------------------------------------------
Trade 2:
Entry Point: 17607
Time of entry (GMT): 21h00
Confirmations:
Market Pattern: Db formed on the 15min TF, with strong momentum candle breaking the neckline.
Fib: DB formed by the Day 0,618 fib level (fib drawn from swing low at C. to swing high at D.) 0,618 fib levels are very strong especially on the D TF
Candlesticks: On the 15min TF, there is a long wick hammer candle right by the D 0,618 fib level + strong momentum green candles on the 15min TF to break the neckline of the DB.
S&R: DB formed by a strong Day S&R zone + D EMA right by this zone providing dynamic support
Trend lines: The trend is your friend - taking a buy in a bullish market will always get you the most pips because rallies can often run for longer than you expect
Stop loss: Half the height of the DB i.e. At 17531
Draw Down pips: 137 pips
TP points: TP1 = 18293,2 (fib level -0,27)
TP2 = 18617 (fib level -0,618)
(Fib drawn from swing low at C. to swing high at D.)
Plan is to close half your position at TP1 and the other half at TP2
Profit in pips: zero
Comments: This trade did not work out - ultimately price came down and took the trade out at entry - Market moved up 3504 pips from entry
--------------------------------------------------------------------------------------------
Trade 3:
Entry Point: 17364
Time of entry (GMT): 20h30
Confirmations:
Market Pattern: A huge DT formed on the D TF with a break of the neckline (neckline and profit target (ie same distance as height of market pattern) marked in orange lines). Price travelled the full distance of the profit target. End of profit target (end of the orange vertical line coincides perfectly with Week 0,382 fib level). Market has a high probability of retesting the neckline of the market pattern after reaching the profit target. I like being part of a retest that is in the same direction as the overall trend. DB formed on the 15min TF at this level with a break of the neckline.
Fib: 15min DB formed right at the W 0,382 fib level
Candlesticks: None
S&R: Strong Day support level + 4H 200 EMA
Trend lines: The trend is your friend - taking a buy in a bullish market will always get you the most pips because rallies can often run for longer than you expect
Stop loss: Half the height of the DB ie. At 17333
Draw Down pips: zero
TP points: TP1 = 18542 (fib level -0,27)
TP2 = 19189 (fib level -0,618)
Fib drawn from swing low at E. to swing high at D.
Plan is to close half your position at TP1 and the other half at TP2
Profit in pips: still in progress
Comments: Trade still in progress - market has moved 10'923 pips from entry
-----------------------------------------------------------------------------------------------
Trade 4:
Entry Point: 17834,6
Time of entry (GMT): 13h30
Confirmations:
Market Pattern: DB formed on 30min TF right at the W 0,382 fib level + D 0,382 fib level. Enter at break of the neckline.
Fib: Area of confluence because Week and Day 0,382 fib levels coincide
Candlesticks: Long wick candle close on 30min TF piercing both the Fib levels but closing above
S&R: 4H support level + D EMA providing dynamic support
Trend lines: The trend is your friend - taking a buy in a bullish market will always get you the most pips because rallies can often run for longer than you expect
Stop loss: Half the height of the DB i.e. At 17825
Draw Down pips: 130 pips
TP points: TP1 = 18307,5 (fib level -0,27)
TP2 = 18581 (fib level -0,618)
Fib drawn from swing low at 3. to swing high at F.
Plan is to close half your position at TP1 and the other half at TP2
Profit in pips: TP1 hit + TP2 in progress
Comments: Tp1 hit at 4748 pips above entry
-----------------------------------------------------------------------------
If you had taken these trades, you would have closed out on 15'691 pips of profit.
Always easier to pinpoint entries in hindsight - but the point of this exercise is to understand these entries and understand why you didn’t take them. This will connect the dots in your brain and then in future, you have a higher chance of spotting these high-quality entries and actually taking them.
Looking at the chart above, one can clearly see the trending market i.e. the market runs and pulls back…runs and pulls back. So you want to get in on the trend at the pull back (at retracement levels).
These are not the only high-quality entries - there were some good sells with the break of the DT necklines (marked in black lines).
But these are sells in a bullish market, so your TP's will never run as far as buys in a bullish market.
A note about stop losses on Nasdaq – my advice is not to set actual stop losses on MT4 or MT5 for your trades because Nasdaq is so volatile that it can often spike you out. Unfortunately, you need to use mental stops and use judgement with stop losses and see how candles CLOSE, not how candles spike.
Once price has moved a significant distance away from your position, you can secure at entry and trade risk free.
Screen time with this index will help you get the "feel" of this
I learnt from this analysis and hope you did too 😊
All the best for March month trading!
TF = timeframe
TP = take profit
1H = 1 hour
4H = 4 hour
D = day
W = week
M = month
S&R = support & resistance
EMA = Exponential moving average
DT = Double Top
DB = Double Bottom
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