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Trading Concepts Summary

Sep 14, 2025

Overview

This lecture covers key trading concepts for the NASDAQ (NQ) futures, including price movements, market trends, liquidity, fair value gaps, entries/exits, and optimal trading times.

Basics of Trading Contracts

  • Price movement from 22840 to 22841 is a one-point move.
  • One NASDAQ contract (NQ) is $20 per point; two contracts equal $40 per point.
  • Recommended symbols to trade: NQ (NASDAQ), ES (S&P 500), GC (Gold).
  • Common timeframes: 1-minute and 5-minute charts.

Market Trends & Structure

  • Three market trends: uptrend, downtrend, and consolidation (ranging).
  • Uptrends create higher highs and higher lows; downtrends form lower lows and lower highs.

Liquidity Concepts

  • Buy side liquidity: move up followed by a move down, often found above highs.
  • Sell side liquidity: move down followed by a move up, usually under lows.
  • Liquidity sweeps happen when price runs above/below key levels and then reverses.

Fair Value Gaps (FVG)

  • Fair value gap (FVG): area where candle wicks 1 and 3 don’t connect, showing imbalance.
  • Bearish FVG: middle candle is red; bullish FVG: middle candle is green.
  • Price often returns to FVGs for mitigation (potential entry/exit spot).

Trade Entry and Exit Strategy

  • Entry after break of structure (change of character) confirmed by a strong candle close and FVG.
  • In uptrend, sell after a strong bearish candle closes below the higher low with a bearish FVG.
  • Target previous sell side liquidity for take profit (TP).
  • In downtrend, buy after a strong bullish candle closes above a lower high with a bullish FVG.
  • Use stop-loss just above/below the wick that forms the FVG.

Price Measurement and Profit Calculation

  • Focus on last two or three price digits for quick point calculation.
  • Multiply points by $20 (per contract) for profit.

Support and Resistance

  • Draw rectangular boxes at levels where price repeatedly rejects for support/resistance zones.

Timing the Market

  • Best trading window: 9:00 a.m. to 1:00 p.m. Central (10:00 a.m. to 2:00 p.m. Eastern).
  • Market is closed/untradable from 3:10 p.m. to 5:00 p.m. CST (lunch break).
  • Sessions: New York session (morning), Asia/Tokyo session (evening).

Key Terms & Definitions

  • Uptrend — Series of higher highs and higher lows.
  • Downtrend — Series of lower lows and lower highs.
  • Liquidity — Unfilled orders above highs (buy side) or below lows (sell side).
  • Liquidity Sweep — Price running above/below liquidity then reversing.
  • Fair Value Gap (FVG) — Imbalance zone between non-connecting candle wicks.
  • Mitigation — Price revisiting a fair value gap.
  • Take Profit (TP) — Target price to exit a trade.
  • Stop Loss — Predetermined exit to limit loss.
  • Support/Resistance — Repeated price rejection zones.

Action Items / Next Steps

  • Review examples of liquidity sweeps and fair value gaps on your charts.
  • Practice marking higher highs, higher lows, and liquidity zones.
  • Watch suggested YouTube/TikTok videos for additional FVG examples.
  • Prepare questions on fib retracement and discount/premium zones for next class.

Full transcript