I had a shower thought… It seems trading the NQ is like walking through a minefield. I mean, a bull trend is moving nicely and then, BOOM, the bottom falls out and we drop 30 – 50 – 100 points in a minute.
Why does this happen? Well, in normal markets, there are market makers constantly manipulating the price. But I think we’re in unusual times when there are things that are happening – politically – that can affect the market just as much.
I was thinking it’d be nice to anticipate a move by constantly having a limit sell/market order that follows a bull trend five or ten points below the current level. The order should be updated at the end of every candle and have a 1:1 RR stop. So, if it doesn’t simply fall 30+ points, then, at least, we’d get out with our shirt.
If it does fall, we could take advantage and go for at least a 1:2 RR. In many cases, 1:3 would probably get filled.
I also think this could be more aggressive than normal trade size. For example, if I normally risk 5 micros, I think I could easily set it up for 2 minis. This would equate to a profit of $600 on a trade that would probably take less than a minute.
I need to do some back testing, but I suspect the win loss ratio would be above 50%…. I’ll report back…