A Nasdaq futures setup using two price levels: enter short when price closes below the 20 level, use a 10-point stop-loss, and take first profits at 15 points. The trader watches for a 50-point move if the stop gets hit.
Let's say you missed this 80 buy. Now it's going to 20. So boom, it tapped 20. This is your 20 level. And again, you're looking for that reaction. So it taps it, then it closes under and you see that reaction. Okay, this is going to be your entry short. I always use a 10-point stop. That's how I keep my risk under control, because if I'm wrong by 10, most likely I'm probably wrong by 50. So this would be my entry short and I would have my first take profit 15 points, cover my risk. So I would have my initial risk covered and then I'm going to see how much I can squeeze out of this move.
