Nasdaq in Neutral Zone

Today I thought I'd test out a daily newsletter, in addition to the big weekend version.

(Hit reply and let me know if you like this or if I should stick with just the weekly)

I've been getting a number of emails and DM's asking about the NASDAQ $NQ/$QQQ trade we are in and building on.

Recall on Monday I shared that we were adding to our long $NQ position above 15142, that price hasn't been taken out and our order is still up there resting, waiting to be filled.

This forces the market to head in our direction before adding to the trade. In other words, if the market doesn't continue moving in our favor, we don't increase our exposure.

I call this the test pass/fail method, and it's the core of how I run all my trades.

Simply put, as an asset moves, we want to place tests on the market to see if it passes the test, or fails the test.

A pass of the test would mean that the market should move as expected from there, a failure would be expected to revert back.

Another key element is knowing that within certain ranges random moves up or down, even multiple percent moves up or down are just noise and don't actually represent the real direction.

For example, $NQ right now is inside its monthly neutral zone. The top of the zone is 15,134 and the bottom of the zone is 14,445.

That's nearly a 700 point range!

A day like today that took a dump into the close shortly after the FOMC meeting minutes were released. This will bring out the same doom and gloom callers will be on their Twitter high horse talking about imminent death and destruction, noting similarities to the Global Financial Crisis or Venezuela or, of course, Tulip Bubbles.

They may point to a head and shoulders top pattern, or some company missing earnings or any other unimportant event.

And this leads us to my favorite subject of Market Regimes.

The neutral zone is a type of market regime where price can bang around up or down and great news happens, bad news happens but it's very day to day.

Another thing to note about the neutral zone on the chart is that price overshoots the top or bottom line of the zone. Most traders get caught up in a specific price level being the most important part, but it isn't.

What's really important is how price handles the test at those levels. The test doesn't begin until the level is breeched, and trading in anticipation of a certain level or outcome without testing the levels is where most traders end up losing money.

We have a BUY STOP above 15142 on $NQ_F

Nothing has changed!

On another note, we will be increasing the monthly subscription price for the Trading Lab in September to $397 per month.

If you've been on the fence about joining us in the Lab you should get in there now before prices go up. 

The Trading Lab is a online trading floor where we share ideas, trades, and research with each other, whether it is backtesting information on new strategies, new cryptocurrency research and insights or live trades. 

We go live every trading day on Zoom day trading currencies (FX), stocks end futures. 

Let me give you an idea of what we are doing in the Lab every day...

Monday for example we had a big 6R trading day on the $NQ futures, where we added multiple times. Three traders who were in the Top Step Trader prop tryout challenge completed the first phase on that day alone!

Then today while the market was bouncing up and down in a tight trading range we had one trader go 5/5 (for 10R total) scalping the $ES and another trader go 2/3 (for +3R) on $EURUSD. 

At the end of July we got long $DIA at $348.91 and held for a week until selling $352.60. This is our end of month swing strategy that has a 75% win rate (92% win rate in the last 12 months), a profit factor of a whopping 9.17 with an avg win:avg loss ratio of 2.82. 

As far as crypto trading goes, we've stayed long our main portfolio and have a very long way to go from here. But also important, for you crypto traders who want to be active in alts, we caught 2R after 2R spikes week after week, then on the week of May 21, we had sold out of all alts and were sitting on cash waiting to get long when the bottom fell out. We were able to sit on our hands, in cash watching the world melt down because we weren't leveraged and we weren't taking haphazard gambles. 

Crypto is still at the bottom, compared to where it's going to be by the end of the year. 

As far as trading alerts go we regularly issue trades in Forex, Stocks, Futures and Cryptocurrencies as well as we maintain a long term ETF strategy for retirement accounts or long term portfolios. 


Whether we are trading short squeeze stocks, cryptos, day trading futures and forex or swing trading, we have it all available in the Trading Lab. 

Remember prices will go up in September, get in now!

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