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QQQ Trade Setup & Entry

QQQ (Nasdaq 100 Tracking ETF) offers an objective short entry on this backtest of the 116 former support, now resistance level with a current sole target of 110.84 (with additional targets likely). Suggested stop on 60-minute close above 117.35.

QQQ 60-minute Sept 12th

QQQ 60-minute Sept 12th

 

As there are numerous proxies for shorting the Q's such as NQ (e-mini futures), QID, QLD, PSQ, SQQQ, TQQQ, etc..., I'm going to leave it up to you to decide which vehicle to use, with QQQ as the official trade. Ideal entry range from 115.00 to 116.50 and a Suggested Beta-Adjustment of 1.00.

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Sep 12, 2016 1:31pm|Categories: Completed Trades - Short|Tags: |3 Comments

3 Comments

  1. Dazi September 12, 2016 2:37 pm at 2:37 pm

    Well, I don’t mind admitting that this scares me. I have bought SQQQ just now, and QQQ keeps going up, and I haven’t had many good trades lately. [which is why I am here and hope QQQ loses!] Yikes, it just makes me tense.
    I’m thinking that if QQQ does hold above 116 at close, I should sell SQQQ.
    Is there anyone willing to help me with this, and determine the Target and Stop [since I wasn’t smart enuf to short QQQ].

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    • GetItRiight September 12, 2016 2:42 pm at 2:42 pm

      A reaction was to be expected after Friday but this reaction seems overdone to the technicals. I guess markets are realizing that they got scared for nothing on Friday, party is still on. I am fortunate to have some more leeway in my DRIP trade, catching it at XOP 39.12 but am losing paper profits quickly, waiting for the pop to fade. I do have a stop in the money but I am still hoping that the divergences from the charts are still playing out.
      Edit: It’s like there is no resistance up ahead just butter.

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    • rsotc September 12, 2016 3:21 pm at 3:21 pm

      Dazi- The suggested stop on this official QQQ short trade is only 1.75% from the level that QQQ was trading when I posted the chart so even if it goes a little higher before a 60-minute close above 117.35 occurs, we’re talking about a ~2% loss on the trade. While this trade, just as with any other might not pan out, the potential R/R is tremendous as I will very likely add additional targets if the charts play out as expected, quite possibly resulting in profits of 5-8x or more the amount risked (i.e.- a 5:1 or better R/R, again, should the charts continue to play out as I suspect they will).

      If you used SQQQ in lieu of QQQ, then ideally, you should have taken a position size 1/3rd of that which you would have on a QQQ short in order to account for the 3x leverage (which cuts both ways). Of course the suggested stops are just that, suggested & based on my preferred stop/loss allowance and minimum R/R which isn’t a one-size-fits-all for everyone. You might consider a more aggressive stop and/or reducing your position (or just closing it out). Everyone has different trading styles & I know from talking to others over the years that my style or going long when most have the strong urge to short or sell as well as shorting when most want to buy, is certainly not for everyone.

      Best of luck on what you decide & if I could give one piece of advice that would be to calculate your total dollar loss on each trade before you enter it, assuming that the stop on your trading plan is hit. Some traders only focus on the profit but find themselves second guessing the trade as soon as it starts to go against them. Losses are about the only thing that I know of that is guaranteed in trading & it’s just takes time (and a lot of them) to get to that point where they hardly, if at all, bother you as you learn to accept them as an avoidable (yet manageable) part of trading & investing.

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