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2025 Lecture Series - NQ April 30, 2025 Review
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2025 Lecture Series - NQ April 30, 2025 Review

NASDAQ Market Analysis and Expectations

Overview of the Current Market Situation

  • The speaker introduces a combined analysis of the NASDAQ market, blending insights from previous and current trading sessions to save viewers time.
  • A volume imbalance is identified in Tuesday's daily candle, where wicks connect two bodies without an actual body present, indicating potential market behavior.

Key Technical Insights

  • The concept of "consequent encroachment" is introduced, with specific reference to measuring wick lengths for future price movements.
  • Anticipation of upside draws ahead of non-farm payroll reports on Thursday and Friday is discussed, highlighting potential targets based on market behavior.

Market Dynamics and Predictions

  • The speaker emphasizes that predictions are not guarantees; traders should exercise caution and not base trades solely on these insights.
  • Discussion about how recent price action filled gaps in the market suggests a bullish sentiment leading into upcoming economic reports.

Detailed Chart Analysis

  • Transitioning to a one-minute chart for more granular analysis, the speaker expresses a desire for better navigation tools within Trading View compared to MT4.
  • Reference to fair value gaps within daily volume imbalances indicates critical areas for traders to monitor as they can influence price movement.

Observations on Price Action

  • Relative equal highs are noted as significant indicators; their presence suggests strong interest above those levels which could lead to further upward movement.
  • The importance of respecting fair value gaps is reiterated; past trading behaviors around these gaps provide insight into future price actions.

Market Analysis and Trading Strategies

Understanding Market Gaps and Resistance Levels

  • The gap was utilized during the Asian session as resistance, leading to a sell-off, demonstrating the importance of recognizing market gaps in trading strategies.
  • The speaker emphasizes the effectiveness of previously outlined levels, noting that they consistently work back and forth in market movements.
  • A specific inversion fair value gap was monitored; its breakdown after trading inside a new week opening gap is highlighted as significant for traders.

Importance of Consistency in Trading

  • The discussion transitions to building consistency in trading practices, emphasizing the need to know what to look for when entering trades.
  • Introduction of the "Venom model," which focuses on identifying higher prices based on market behavior throughout the day.

Liquidity and Market Movements

  • Explanation of sell-side liquidity dynamics: a drop through lows followed by rapid upward movement indicates accumulation before price increases.
  • The "Venom model" consists of two key components (fang one and fang two), which are crucial for understanding price action related to liquidity stops.

Entry Strategies Using Candlestick Patterns

  • Discussion on entry strategies before breaking previous candle highs; options include using buy stops or limit orders at specific candlestick openings.
  • A practical example is provided where a limit order is placed at 19,174.00 following a candlestick close, illustrating real-time application of trading strategies.

Risk Management Techniques

  • Emphasis on setting stop-loss orders just below critical levels (consequent encroachment), ensuring risk management aligns with the Venom model's principles.
  • Personal anecdote about deviating from planned trade setups serves as a reminder about discipline in trading practices despite successful outcomes.

Observations on Market Behavior

  • Notable observations regarding market reactions around opening range gaps indicate potential buying opportunities within established models.

Market Analysis and Trading Strategies

Price Action Observations

  • The next candle is expected to go bullish, opening slightly below the previous one but quickly rejecting it and moving towards the buy side. Smooth price action is noted before a jagged movement occurs.
  • There is significant consolidation observed, with price action pushing into the new week opening gap. The speaker emphasizes the beauty of the price action bodies during this phase.
  • The speaker clarifies that while they did not create the concept of gaps at market openings, they provide unique logic for trading these gaps with precision, which isn't found in traditional literature.

Trading Models and Gaps

  • A recent drop takes out sell-side liquidity before gravitating back up to the new week opening gap low. This small scalp opportunity could represent an effective trading model.
  • The concept of "consequent encroachment" is introduced, where a wick indicates potential discount levels when prices rise above it. This can signal entries as prices are likely to revert back into established gaps.

Market Timing Considerations

  • The discussion shifts to typical market behavior on Wednesdays during non-farm payroll weeks, suggesting caution in trading during this time due to unpredictable movements.
  • Emphasis is placed on understanding different time frames: daily charts for short-term trades and monthly charts for swing trades. This knowledge aids in anticipating market movements leading into key economic events.

Risk Management Advice

  • New traders are advised against active trading in the final hour of non-farm payroll weeks (Wednesdays and Thursdays), as it poses significant risks without clear justification.
  • It’s recommended that traders dial back their exposure and risk during volatile periods by reducing trade frequency and leverage, focusing instead on earlier sessions in the week.

Final Thoughts on Trading Strategy

Playlists: 2025 Lecture Series
Video description

Government Required Risk Disclaimer and Disclosure Statement CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN Trading performance displayed herein is hypothetical. Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance trading results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. U.S. Government Required Disclaimer – Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with money you can’t afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. Trade at your own risk. The information provided here is of the nature of a general comment only and neither purports nor intends to be, specific trading advice. It has been prepared without regard to any particular person’s investment objectives, financial situation and particular needs. Information should not be considered as an offer or enticement to buy, sell or trade. You should seek appropriate advice from your broker, or licensed investment advisor, before taking any action. Past performance does not guarantee future results. Simulated performance results contain inherent limitations. Unlike actual performance records the results may under or over compensate for such factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profits or losses to those shown. The risk of loss in trading can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. If you purchase or sell Equities, Futures, Currencies or Options you may sustain a total loss of the initial margin funds and any additional funds that you deposit with your broker to establish or maintain your position. If the market moves against your position, you may be called upon by your broker to deposit a substantial amount of additional margin funds, on short notice in order to maintain your position. If you do not provide the required funds within the prescribed time, your position may be liquidated at a loss, and you may be liable for any resulting deficit in your account. Under certain market conditions, you may find it difficult or impossible to liquidate a position. This can occur, for example, when the market makes a “limit move.” The placement of contingent orders by you, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.