On Tuesday, we saw a huge move higher in the indices because of trade chop. This sector followed through higher in the overnight session, but eventually opened lower. After Wall Street opened, it was an absolute chop fest as illustrated in the chart of the $NQ below.
This is the way I trade chop: I use my mathematical support and resistance levels
. I bought the first break and did not get greedy taking a small profit. Then I sold the next rally again taking a small profit. I made money on two trades and walked away from the computer.
“Chop” will destroy the best traders ever. In “chop” traders tend to get topped and tailed. Make your money quickly. Shut the computer off and go enjoy your life. The market will open the same time tomorrow, next week and next month.
Get more of Tony LaPorta’s trades, analysis and commentary, at Simpler Futures