Kicker Pattern Reversal

Entry Logic

• Exact entry trigger: Buy on the open of the second candle.
• Confirmation requirements: A two-candle pattern. The first candle is bearish. The second candle is bullish and opens above the high of the first candle (a gap up).
• Timeframe required: Any timeframe.
• Location context: At a support level.
• Market condition requirement: A market that is reversing sharply.

Exit Logic

• Profit target(s): A measured move target.
• Scaling out rules: N/A.
• Trailing stop rules: Use a fast EMA.
• Exit on signal failure: A close below the low of the second candle.
• Exit on opposite signal: A strong bearish pattern.
• Exit on time expiration: N/A.
• Exit on momentum loss: N/A.

Stop Loss Structure

• Hard stop location: Below the low of the second candle.
• Soft stop rules: N/A.
• Maximum dollar loss per trade: 1% of capital.
• Maximum percent loss per trade: N/A.
• Structural stop placement: Below the support level.

Risk Management Framework

• Risk per trade: 1%.
• Maximum daily loss limit: 2%.
• Maximum weekly loss limit: 5%.
• Maximum drawdown allowed: 15%.
• Risk-reward ratio requirement: 1:3.

Position Sizing Model

• Recommended sizing approach: Fixed risk.
• Volatility-based adjustment: N/A.
• Conviction-based sizing (A+/A/B setup): A+ for a pattern with a large gap and high volume. A for a standard pattern. B for a pattern with a small gap.
• Scaling in rules: N/A.
• Scaling out rules: N/A.

Trade Filtering

• Market conditions to avoid: A strong downtrend.
• Specific setups required: A clear Kicker pattern.
• Stock/instrument requirements: Any liquid instrument.
• Time of day restrictions: N/A.
• Chop/news avoidance rules: N/A.

Context Framework

• Trend direction assessment: A sharp reversal.
• VWAP relationship: N/A.
• Moving average relationship: N/A.
• Range location: At the bottom of a range.
• Higher timeframe alignment: N/A.

Trade Management Rules

• When to move stop to breakeven: After a 1R move.
• When to scale out: N/A.
• When to add size: N/A.
• How to handle fast moves vs slow moves: This is a fast move strategy.

Time Rules

• Optimal trading window: N/A.
• Times to avoid: N/A.
• Session-specific notes: N/A.

Setup Classification

• A+ setup criteria: A perfect pattern with a large gap and high volume.
• A setup criteria: A standard pattern.
• B setup criteria: A pattern with a small gap.
• C setup criteria (avoid): A pattern not at a support level.

Market Selection Criteria

• Instrument requirements: Any liquid instrument.
• Volume/liquidity requirements: High volume.
• Volatility requirements: N/A.

Statistical Edge Metrics

• Expected win rate: 75-80%
• Average win size: 3R
• Average loss size: 1R
• Profit factor: 3.0 - 4.0
• Expectancy per trade: 2R.

Failure Conditions

• Market conditions where strategy fails: A persistent downtrend.
• Specific scenarios to avoid: A pattern with no gap.

Psychological Rules

• Key mental discipline requirements: Acting quickly.

Advanced Components

• Market regime detection: N/A.
• Volatility/liquidity filters: N/A.
• Correlation filters: N/A.
• Multi-timeframe alignment: N/A.

Location

• Where this setup is strongest: After a news event.
• Where this setup is weakest: In a quiet market.
• Location changes outcome: Yes.