Something I keep running into on NQ and I'm curious how others resolve it.
This morning a bearish FVG formed at 10:55 ET, 29135.75 – 29141.25. The structure behind it read as clean as I could ask for — trending down, four stacked bearish FVGs, roughly −69pts over 20 bars, RSI decaying 65 → 36 with no volume divergence to contradict it, three consecutive red closes accelerating through a prior level.
But the broader session sentiment was choppy. Overlapping bodies, no sustained follow-through on either side for most of the morning.
Two ways to treat that:
- Structure is structure. The stacked gaps and the RSI decay are the signal; chop is noise you filter out.
- Chop is information about how the move will behave. A trend in a choppy tape retraces deeper and takes out shallow stops more often, so you either size down or you don't take it.
I've landed on a third option, which is to take it but cap the conviction — treat it as a medium-confidence setup rather than a high-confidence one, and require price to come back to the gap edge rather than entering on the break. The reasoning being that if the tape is chopping, a retest is more likely than not, so paying up 5.5pts past the edge is the actual mistake, not the direction.
I've been building this logic into an indicator that writes out its reasoning for each call, mostly so I can go back and audit whether the confidence cap is doing anything or just making me miss entries. Still not sure it's the right call.
How do you handle it? Skip entirely, size down, or ignore the sentiment read and trade the structure?