Nasdaq is a game of stop-gunning and shakeouts. This is good news for short-term traders. My strategy is to patiently wait for the shakeout and then go the other way.
A few guidelines I use:
1. Look for a reversal in the 10am - 11am timeframe if the first move of the day is 'away' from the previous days
value area. There is very often a shakeout move that looks violent but is often a good counter-trend trade. It will often look like a trend day but the odds are to fade the shakeout and think about trading back towards 'value' -- think Dalton -- you are getting asymmetric location when you fade a morning 'price spike'... even trend days will often have a monster counter-move shakeout which you can catch for a few points. you are not investing with the closing price in mind -- you are just playing for a flush in your direction.
2. Look for ABC pattern to set up... this is often another shakeout play as a lower low or higher high looks scary but is usually just another counter-trend set-up.
3. You don't need to try to pick tops and bottoms. 7-10 point swings are common -- just try to catch the middle part of the move.
4. Look for NQ to touch its previous days
POC -- it is a volatile contract that will touch its previous days
POC 75%+ of the time. NQ loves to hunt down the previous days
POC -- often even when it seems totally unreasonable. In general, its a good idea to look to trade in the direction consistent with NQ touching its previous days
POC (though there are clear exceptions).
5. Don't overtrade this contract. There is all the liquidity you need. You just need to pull a few points out a day to make a living. Make 3-6 points per day with good size and you will rule the world. Some days, the thing is just nasty. Avoid it for a while. For example -- today -- NQ gapped down TOWARDS thursdays
POC at 1954.50 (you prefer the first move to start AWAY from the previous
POC). When it gaps and then carries into it, the market is basically back in balance and might just chew everyone up for a while. This is what happened. I may still try a trade in it but I will use smaller size.
Comments and other observations. Please join me. You are not 'giving away secrets'... we are all peons in a world of immense institutions. their algorithms couldn't care any less about our scalping strategies.