A trader explains the 80/20 NASDAQ strategy: watch for price to tap a specific level like 25,680, then buy when it bounces. Take profits at 703 points on the first contract, move your stop to break-even, and aim for 100 total points. Speed and discipline matter.
My strategy is called the 80/20 strategy and it's based off the NASDAQ. So let's say it's trading at 25,680. I would be looking at these two numbers, 80, and if it was trading at 25,620, I'd be looking at this number. So let's say it's the New York open and we're going into 25,680. It's a choppy market. Let's say it's opening like this. So you have a candle here and it's going into 680. Now I'm looking to see if it taps 680, it taps it, boom. And I see an instant reaction higher. As soon as this is tapped and I see that it's giving a reaction, I'll take that entry long. Okay, I take one contract off here. 703, I take another contract off here, and I see that it's slowing down. Okay, I'll set my stop to break even back here at 680. If I can get 100 points out of it, great. If not, then it heads back down to break even, I get stopped out, and that trade is done.
