My Day Trading system in a nutshell (Part 6) - NDX and Level II (of course!)

Keep a constant eye on these 2 tools: NDX and Level II. Unless you are very new to this business, you know those 2 tools.

Today we will talk about NDX (*).

=> The NDX is an index, i.e. the composite of the group of stocks it represents.
=> The NDX shows whether the market is trending or if it is choppy.
=> It “should” only reflect a posteriori price movements and trends … Yet, unless some news hit a specific stock, securities follow pretty much the same trends as one another.
=> Some stock moves even drag slightly behind the NDX.

How to use it?
Simply keep an eye on it. If, for instance, your indicators send a Buy signal and the NDX is in an obvious tailspin, do not get into the trade!
Use lines (as opposed to bars or candlesticks).
FYI: Supports and Resistances do apply to the NDX too.

(*) This is assuming you work on NASDAQ 100 securities, as recommended.


More on Level II very soon.

Good trading to all,

Mark