Trading Methodology
How To Read The Daily NQ Plan
This explains the logic behind the daily plan: how key levels are chosen, what each trade idea label means, and how to actually use the plan in real time. It is not a signal service — the plan gives you zones and conditions, you still have to watch price and pull the trigger yourself.
How This Plan Works
Every day we mark the NQ zones that matter and say exactly what we’re watching for at each one — does it hold, does it break, does it come back above or below. You don’t need an opinion on where NQ is heading. You just watch those zones and react to what actually happens there.
If one of them does what we’re watching for, that’s a trade. If nothing happens at any of them, there’s no trade that day — and that’s fine.
This plan is built mainly for scalps — quick trades off these zones rather than holding for a big move. Take most of the position off near the first target. Only leave a small piece on when the zone that triggered the trade was a strong one.
What Makes A Level “Significant”
Not every number on a chart matters. A level earns a spot in the plan because it is one of:
- A prior session’s high or low, including levels that formed around major news releases
- A multi-hour high/low that produced a real, meaningful move
- A cluster/shelf of multiple highs or lows sitting at roughly the same price
- A trendline or chart pattern boundary — a bull flag, a megaphone, a triangle, or any other structure forming on the chart over time
The more of these conditions a level satisfies, the more weight it carries. Levels also decay: once tested and reclaimed several times, a level gets “used up” — it can still react, but the odds of a clean, explosive move off it go down each time it’s retested.
The Failed Breakdown — Our Core Setup
This is the setup behind the majority of the longs in the plan. A Failed Breakdown happens when price breaks below a significant level — sweeping it, trapping the shorts and the stop-loss orders sitting below it — then recovers back above that level shortly after.
The logic: big institutional buyers often need liquidity to put on size. The cleanest way to get it is to push price below an obvious level, trigger everyone’s stop-loss and short entries, then buy aggressively once that supply is exhausted. The sweep is the signal, not something to be afraid of.
A note on move size: don’t judge a flush by a fixed number of points — judge it against the day’s actual ATR. On an average day, a flush worth paying attention to is roughly 60–80+ points, but that scales with volatility: on a high-ATR day the same move can be considerably bigger and still just be noise, while on a low-ATR day a much smaller flush can already be structurally significant.
Reclaiming the level after the sweep is called a Failed Breakdown — also known as a Look Below and Fail: price looks below the level, fails to hold the break, and snaps back above it.
In choppy, rangebound conditions, you don’t always need a full Failed Breakdown. A proven level can simply be played as straightforward support/resistance for a short scalp (roughly 8–20 points) in both directions, as long as the broader structure isn’t breaking down around it.
Breakdown Trades & Counter-Trend Setups
Breakdown Trade is the mirror image of the Failed Breakdown — the setup behind “Short below after bounce” in the Trade Ideas list. A level breaks down for real; price doesn’t just dip and snap back, it stays below. From there, wait for price to bounce back up and retest the broken level from underneath. If that level now acts as resistance and gets rejected, that rejection is your signal: short beneath the low of that failed bounce.
This is lower win-rate, higher-risk than the Failed Breakdown. Most breakdowns are actually traps that turn into Failed Breakdowns instead — never short the first touch of a broken level on its own.
Counter-Trend Trades — a Counter Trend Long or Short is any trade taken against the broader intraday direction. These go against the path of least resistance, so they carry a lower win rate than trading with the trend. Treat them as quick scalps: take the first reaction off the level and get out. The further the zone is from current price and the less it’s been tested, the lower the odds — which is why some are explicitly labeled (risky) or (extreme).
These are always a risky trade. In a real downtrend, a counter-trend long zone can just break with no meaningful bounce at all before the trend keeps going — the level doesn’t owe you a reaction. That’s exactly why size stays small, why the target is a fast 8–15 points at most, and why the stop is hard — you’re out on the first sign it isn’t working, not holding through it.
Acceptance — Don’t Just Buy The Reclaim Blindly
The #1 mistake with Failed Breakdowns is rushing in the instant price pokes back above the level. You need to see “acceptance” first — proof that price actually wants to be back above the level, not just wicking through it.
Classic acceptance: price backtests the level from above after reclaiming it — sells off a bit, returns to the level, holds — showing there’s no more supply sitting there.
Non-acceptance protocol: in fast, high-volatility conditions, price sometimes just rips straight through the level with no pause at all. In that case, wait for price to clear roughly 20 points above the level and hold there for a few minutes before considering a long. The zone right around the level is the highest-risk “trap zone” — most failed entries happen there.
Whichever form of acceptance you’re looking at, check it on at least a 5-minute chart, not just tick-by-tick noise. It’s not a guarantee of anything, but it filters out a lot of false signals that only look real on the smallest timeframes. If you don’t see one of these two signals, you don’t have a trade yet — you wait.
Falling Knives — When Not To Trust The Levels
When the market is in full falling-knife mode — a sharp, violent, one-directional move with large spikes — don’t go anywhere near the levels. Price can cut through level after level with no real reaction, like they aren’t even there.
Let the market slow down and settle first. Wait for the violent part of the move to exhaust itself before trusting support/resistance again. Trying to catch a level in the middle of a knife is how accounts get hurt.
How To Read The Trade Ideas List
This is the glossary. Every label below is something we actually write in the plan — read this section until you can hear one of these phrases and immediately picture the candles it’s describing, not just the words.
Other terms you’ll see in the plan, outside the Trade Ideas list:
Pivot Bull / Pivot Bear
These two zones are the single most important reference points in the plan each day. If you only watch two numbers all day, watch these.
Pivot Bull
The line in the sand above. Once price closes back above it and stays there for a real stretch — not one wick, several candles — that’s “reclaimed and held”: the market usually tends to continue the trend higher from there, and shorts above this line are risky.
Pivot Bear
The line in the sand below. Under it, we usually sell faster and harder — a close below it that sticks is “lost with acceptance,” and control shifts to sellers. Longs under this line are risky and should only be fast scalps.
Key Confirmations — Strength / Weakness
“Strength confirmed above [level]” and “Weakness confirmed below [level]” mark the outer boundaries of the day’s structure. They’re written as a close, not a wick: once price closes above the Strength level, the bullish case for the session is fully confirmed; once it closes below the Weakness level, the bearish case is.
But once one of these breaks, it can turn into a tradeable level itself: if Strength Above gets broken and then retested with the market holding above it, that retest can be played as a long. The same works in reverse for Weakness Below — if it breaks and price comes back up to test it from underneath and gets rejected again, that rejection can be used as a short, or as extra confirmation inside another trade you’re already considering.
Putting It Together — How To Actually Use The Daily Plan
- Read the plan before the session. Know the Pivot Bull/Bear and the Support/Resistance ladder.
- Don’t take a position just because a number is “close.” Wait for the specific condition listed next to that level to actually happen.
- Confirm acceptance before entering a reclaim-based long, and don’t trust any level while the market is in falling-knife mode.
- Confirm the level with whatever indicators are part of your own strategy — delta, EMAs, VWAP, volume profile, or anything else you rely on — before pulling the trigger.
- Take the scalp near the first target. If you leave anything on, keep it small.
- If nothing on the list triggers, that’s a normal day — sit on your hands. Not trading is a valid outcome.
- Re-read the plan the next day — levels that held get reused, levels that broke get replaced, and the pivot structure updates based on what price actually did.
It isn’t complicated — the hard part is discipline: wait for your zone, confirm acceptance, and take it one setup at a time instead of guessing.
