TradeCompass for Nasdaq Futures – January 23, 2025

Current Price at the Time of the NQ analysis: 21,894
The TradeCompass guides our bullish and bearish thresholds and outlines profit-taking targets to help you navigate the Nasdaq Futures market effectively. Here's the breakdown:

Bullish Scenario

• Bullish Above: 21,928
• Profit Targets for Long Positions:
  1. 21,945 – Aligns with the current Value Area High (VAH). Move your stop to the entry point here.
  2. 21,965 – Just below today's VWAP.
  3. 21,988.5 – Another quick target near resistance.
  4. 22,017 – Slightly below yesterday's POC, a critical area to assess strength.
  5. 22,054 – A key level to monitor for momentum.
  6. 22,073 – Positioned just under yesterday's VAH.
  7. 22,120 – A higher extension target.
  8. 22,184 – Final extended target for bullish moves.

Bearish Scenario

• Bearish Below: 21,800

• Profit Targets for Short Positions:

  1. 21,862 – Positioned above the second lower standard deviation of yesterday's VWAP and near the current VAL.
  2. 21,852 – A follow-up target for quick profit-taking.
  3. 21,817.5 – Another key level indicating a deeper move.
  4. 21,780 – Near today's third lower standard deviation and above January 20th’s VAH.
  5. 21,731.5 – A more distant target representing a significant price move.
  6. 21,673 – Just above January 21st's VWAP.
  7. 21,634.5 – The ultimate target at January 21st’s VAL.

Benefits of Trading with Volume Profile and VWAP

Using Volume Profile and VWAP (Volume Weighted Average Price) in your Nasdaq futures trading strategy offers numerous advantages:

1. Enhanced Price Prediction:
   Volume Profile identifies key price levels where significant trading activity occurred, highlighting zones of support and resistance. VWAP helps gauge the average price weighted by volume, offering insights into market sentiment for Nasdaq futures today.

2. Market Context:
   These tools help distinguish between trending and consolidating markets, enabling traders to adapt their strategy effectively.

3. Key Levels for Entries and Exits:
   By analyzing the interaction of price with VWAP and Value Area levels (such as VAH and VAL), traders can find high-probability entry and exit points for both bullish and bearish trades.

4. Risk Management:
   Volume Profile highlights areas of strong support or resistance, while VWAP bands offer natural zones for placing stop-loss orders. This ensures disciplined risk control in volatile Nasdaq price movements.

5. Identifying Reversals and Trends:
   VWAP and its deviations dynamically adjust based on trading activity, helping traders spot early signs of reversals or trend continuations in Nasdaq price prediction.

6. Scalability Across Timeframes:
   Both tools are effective for intraday trading as well as longer-term strategies, making them versatile for Nasdaq futures analysis.

Key Notes

1. Stop Management:
   For both long and short trades, move your stop-loss to the entry point after hitting the first profit target to minimize risk.

2. Partial Profit-Taking:
   Ensure you take profits progressively at each target to secure gains and reduce exposure.

3. TradeCompass as a Guide:
   Use these levels as an orientation to plan your trades. Adjust based on market behavior at key levels and current stats.

Disclaimer

This is not financial advice. Always trade with caution and proper risk management. Visit ForexLive.com for additional insights and updates.

Thank you, and trade wisely!

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Nasdaq Futures TradeCompass Update (January 23)

Today’s TradeCompass highlighted key thresholds for Nasdaq Futures, with a short trade triggered below 21880 and a long trade triggered above 21928. Here’s how the day unfolded:

Short Trade Recap

The short trade under 21880 was triggered; however, in hindsight, price never sustained below this level, as no 5-minute candle closed beneath the bearish threshold. The price came close to the first profit target, which would have allowed us to secure partial profits and move the stop-loss to the entry, but it didn’t quite reach the target. The trade ultimately hit the stop and resulted in a loss.

Long Trade Recap

Later, the long trade was triggered with a move above 21928, as outlined in the TradeCompass. The first profit target at 21945 was reached successfully, and as per the approach, the stop-loss for the remaining position was moved to the entry point, which was eventually hit. This resulted in a small profit on the long trade.

Overall Outcome

Today’s trades resulted in one losing short and one winning long, with a very small net loss overall. As per the TradeCompass approach, which limits trading to a maximum of one directional trade per compass per day, we are done for the session.

Hindsight Reflection

In hindsight, today’s price action suggests that it was likely setting up for an inside bar. For those unfamiliar, an inside bar is a candle fully contained within the range of the previous candle. Its high is lower than the prior candle’s high, and its low is higher than the prior low. This pattern often signals indecision or a temporary balance between supply and demand.

While the TradeCompass is designed to identify key barriers, today’s conditions may have favored fading the barriers (taking the opposite side of the thresholds) rather than seeking breakout momentum.

Final Note

Thank you for following today’s update. Remember, the disciplined approach of the TradeCompass limits us to one trade per direction, ensuring controlled and focused trading. See you on the next TradeCompass update!