Nasdaq Intraday Review - Tuesday 7 Jan 2025I trade Nasdaq exclusively
Trading in GMT time zone
Sharing my post day review and analysis in case it can help you!
Did my analysis at +- 5:30 am GMT (00:30 am EST)
Economic news - JOLTS Job Openings @ 15h00
News - None
Directional bias - BUY
Morning analysis:
M TF - Currently showing bullish sentiment, even after last month's doji candle close.
W TF - Bulls have managed so far to keep price above W neckline (on the W TF change the chart type to line chart and you will clearly see the "M" representing a DT market pattern).
D TF - D 0.618 SELL fib level was broken, as bulls pushed price up well above this level and managed to close the D candle above it. Even though bulls showed massive strength on Monday, they were unable to close the D candle above the D falling wedge pattern top blue line, i.e. they were unable to break the pattern upwards. At time of writing in the morning, temporary blue downtrend line is being respected. The blue downtrend line represents the D downtrend of the falling wedge (drawn on the D TF) and the green down trendline represents the 4H downtrend line (drawn on the 4H TF)
4H TF - Potential neckline of a DT noted and marked with orange. If the 7am candle breaks this neckline downwards, price will push down because we are at the top of a higher TF market pattern (D falling wedge) + we have a 4H DT. These are strong bearish signals, but they will only be valid should price action give a reversal signal by bears being able to break the orange neckline downwards. The D buy fib levels coincide with the 4H buy fib levels as both are drawn from swing low at B to swing high at A on each respective TF. This gives a form of TF confluence and makes these levels stronger.
1H - Bears have managed to break below the pivot point + 1H EMA. The 1H candle that closed at 6am, wicked down to the pink uptrend line and there was a strong reaction (long lower candle wick) alluding to the validity of this uptrend line.
Interest area's:
1. One buy area of confluence marked in green highlight - 4H EMA + D EMA (at that time) + D 0.382 buy fib level
As the day progressed:
Bulls managed to push up and break the pivot point upwards.
The candle that broke the pivot closed right on the 30min EMA. When Nas is very bullish or bearish, the 30min EMA will act / be respected as dynamic support and resistance.
Hence, I didn't want to enter my buy right at this level. I waited to see what price action would reveal.
Looking at the 15min TF you can see a small price retracement to the pivot point (red candle at C.), a doji right at the pivot point and a green candle pushing up and away from the pivot and closing higher .
It was at this point that I entered on a full position size, as I deemed my risk low because I had waited for the break and re-test:
Entered a buy at the hand icon - Confirmations:
1. Market pattern - 30 min DB with neckline broken upwards and re-tested
2. S&R - pivot point + 1H EMA acting as dynamic support
3. Trend - Buy is in the overall bullish direction of the recent market and temporary orange downtrend line broken upwards. Price also rejecting and moving away from temporary down trend blue line
4. Fib -
5. Candlesticks - bullish engulfing candle to the left of C. on the 1H TF + previous long wick candle rejecting the D sell 0.618 fib.
Mental SL placed at the thick pink line, so that the pivot point the 1H EMA and bulls rejecting the 4H neckline could possibly protect my buy.
Price action was a bit choppy, but I held my position open as price was making higher highs and higher lows on the 1H TF. Price gradually trending upwards along the 1H EMA.
Then news came out at 15h00 and price fell through the floor.
JOLTS Job Openings is not really a "high impact" news event for Nasdaq like the CPI and NFP is. So this was a surprisingly volatile move, indicating how sensitive traders are to economic news that would affect Fed decisions regarding rate cuts.
For me, up until the news, Nas was showing really good bullish price action. And then price just fell through the floor.
I closed my biggest position at 1'150 pips loss (as I usually don't like to take losses of more than 1'000 pips a day). My smaller position size, I hesitated to close and took a loss of 2'411 pips! WHAT THE HELL!!!
This was the fist time in a long time that I hesitated to close and it cost me badly, my emotions really got in the way here.
Then, as per my strategy, when price reached my interest area, I moved down to the 5min TF and entered a buy when price made a DB on the 5min TF at the lower hand icon..
But that was a false signal i.e. a small bounce off a strong reversal zone, but price ultimately tanked further and I closed at 1'126 pips loss.
What a freakin disaster....I basically took a 2'927 pips loss today (if I smooth the effect of position sizing).
Part of this loss is due to variance and part of it is due to my own fault.
There is no way I could have projected that Nas would fall through the floor on this news event and I don't regret my entry as I do believe my entry is correct for my bias and I did wait for the break and re-test.
My mistake was that I hesitated to close and took a bigger loss than I should have.
I also should not have entered again if I had already taken such a huge loss for the day. My strategy is to be out for the day if I make a 1000 pip loss.
So it was a bit of a disaster.
Nasdaq (and mostly myself) DESTROYED me today!
After this devastation to my trading account, I think I will sit the rest of the week out, as tomorrow market are closed in national mourning and then Friday is NFP which I don't trade anyway.
I need market to be as "normal" as possible because now I have my work cut out for me to slowly make up these losses. I will need to look for good quality entries and limit my risk.
Losses are normal in trading and these will be faced by every trader. But the biggest damage a trader can do to his progress is to have uncontrolled losses and let losses get bigger than they should.
It has been many months since I made this error, so I am making progress, but one bad day can cause serious damage.
Limiting losses is more important than making money. If you don't have this skill you will never be profitable over the long run - I was reminded of this valuable lesson today.
Hope you had a better day than me!
Abbreviations:
TF = timeframe
TP = take profit
1H = 1 hour
4H = 4 hour
D = day
W = week
M = month
S&R = support & resistance
H&S = head & shoulders
EMA = exponential moving average
SL = stop loss
