This trade on NAS100USD (Nasdaq 100) was executed on May 13, 2025, based on a well-structured setup and a comprehensive understanding of the market conditions. The market sentiment was bullish, driven by strong performances from major tech stocks and positive economic outlooks. By analyzing higher timeframes, we identified a clear uptrend, with a solid break and retest strategy applied at the 20,800 level. This method allowed for a precise entry with a calculated risk-to-reward ratio, ensuring that we stayed disciplined in our approach while maximizing the potential for profit. Let’s break down the trade and examine how we applied technical analysis, risk management, and market sentiment to achieve success.
Before the Trade:
1. Trade Setup:
- - Instrument: NAS100USD (Nasdaq 100 Index)
- - Entry Price: 20,800
- - Stop Loss (SL): 100 pips (20,700)
- - Take Profit (TP): 200 pips (21,000)
2. Higher Timeframe Analysis:
- - Bullish Bias on Higher Timeframe: The higher timeframe (H4/Daily) was indicating a bullish trend. Price was respecting support levels around 20,500, and key momentum indicators, like the 50 and 200 EMA, were showing an uptrend.
- - Previous Price Action: The price was trending upward, making higher highs and higher lows. This confirmed market participants' continued buying interest.
3. Market Sentiment:
- - Sentiment: Overall market sentiment was bullish, driven by positive economic news, particularly in tech stocks. The Nasdaq is a key driver of the bullish market sentiment, and the recent pullback provided a good opportunity for buyers.
- - Economic Factors: As of late, investor sentiment has been buoyed by favorable earnings reports and optimistic projections for tech stocks, especially with strong performances from companies like Apple, Nvidia, and Tesla.
4. Risk Management and Entry Strategy:
- - Risk Management:
- - A 100-pip SL was chosen to manage risk while keeping the trade within reasonable risk-to-reward ratios.
- - The TP was set at 200 pips (1:2 risk-reward ratio), ensuring that the potential reward justified the risk taken on the trade.
- - The position size was calculated based on a fixed percentage of equity, ensuring consistent risk management across trades.
- - Break and Retest Entry Method:
- - The entry was based on a break and retest method:
- - Break of resistance at 20,800.
- - After the price broke the resistance, a retest occurred around the 20,800 level. This retest confirmed the breakout was valid, and the market was likely to continue higher.
- - Entry was made on this confirmed retest, ensuring that the move had strong momentum and the setup was valid.
- - The entry was based on a break and retest method:
After the Trade:
1. Trade Outcome:
- - Result: The trade reached TP at 21,000, securing a 200 pips profit. The breakout above 20,800 held, confirming the continuation of the bullish trend. The market surged upward, fulfilling the target.
2. Higher Timeframe Confirmation Post-Trade:
- - After the entry, the higher timeframes continued to show bullish conditions, with price action forming higher highs and higher lows. The breakout at 20,800 was a confirmation of the continuation of the bullish trend.
3. Risk Management Review:
- - The 100-pip SL was hit correctly to protect against any false breakouts. The position was well within the allowable risk tolerance, and the reward of 200 pips represented a well-executed risk-to-reward ratio of 1:2.
4. Execution of Break and Retest:
- - The break and retest strategy was successfully executed, as the price broke above 20,800, tested the level, and then resumed its upward movement toward the target. This method of entry confirmed the validity of the trade, as it aligned with both technical indicators and market sentiment.
Discord Before & After:
Conclusion:
The trade was executed flawlessly, benefiting from a clear breakout and retest of the key resistance level at 20,800. With a bullish higher timeframe bias and solid market sentiment, the price continued to push upwards, hitting the take profit at 21,000. The use of proper risk management ensured that the trade was protected with a 100-pip stop loss, allowing for a 1:2 risk-to-reward ratio. This setup perfectly exemplifies how disciplined trading, informed by a combination of technical analysis and market sentiment, can lead to profitable outcomes. By following the plan and staying patient, this trade successfully captured the bullish movement, reinforcing the importance of a structured approach in trading.
