1. Channel Breakout

Entry Logic

Price closes outside a defined channel. Confirmation is a subsequent candle closing outside the channel. Timeframe is 5-minute or 15-minute. Entry is at the close of the confirmation candle. Market condition is trending or emerging trend.

Exit Logic

Target is 1.5x initial risk. Scale out 50% at 1x risk. Trail stop at 0.5 ATR from prior candle high/low. Signal failure: price re-enters channel. Time expiration: no target reached within 90 minutes. Momentum loss: 3 consecutive candles fail to extend in breakout direction.

Stop Loss Structure

Hard stop at the opposite side of the breakout candle's range. Max dollar loss $200 per trade. Max percent loss 1.5% of account. Structural stop at the channel's midpoint.

Risk Management Framework

Risk 1% of account per trade. Daily loss limit 3%. Weekly loss limit 8%. R:R requirement 1.5:1 minimum.

Position Sizing Model

Size based on stop loss distance. Volatility adjustment: smaller size for wider ATR. Conviction sizing: no higher than 1.5% risk on A+ setups. Scale in: no. Scale out: yes, at 1R.

Trade Filtering

Market conditions: moderate volatility, clear trend or range expansion. Setups: channels with at least 2 touches on each side. Instruments: ES, NQ, RTY, CL. Time restrictions: avoid first 15 minutes, last 30 minutes. Chop avoidance: avoid low ATR periods. News avoidance: avoid 15 minutes before/after high-impact news.

Context Framework

Trend direction: breakout must align with higher timeframe trend. VWAP relationship: price breaks above/below VWAP for long/short. MA relationship: price breaks above/below 20-period EMA. Range location: breakout from mid-range is weaker. Higher TF: daily/4-hour chart shows congestion or trend continuation.

Trade Management Rules

Move to breakeven after 0.75R profit. Scale out 50% at 1R. Do not add size. Fast moves: tighten trailing stop to 0.25 ATR. Slow moves: allow more room for stop, 0.75 ATR.

Time Rules

Optimal window: 9:45 AM - 11:30 AM EST, 1:30 PM - 3:00 PM EST. Times to avoid: 8:30 AM - 9:45 AM EST, 12:00 PM - 1:00 PM EST. Session notes: New York session open and afternoon.

Setup Classification

A+: Breakout with strong volume, aligned with higher timeframe trend, 3+ touches on each channel side. A: Breakout with good volume, aligned with higher timeframe trend, 2 touches on each channel side. B: Breakout with average volume, conflicting higher timeframe trend, 2 touches. C: Low volume breakout, no higher timeframe alignment, weak channel definition.

Market Selection Criteria

Instruments: ES, NQ, CL, GC. Volume: average daily volume > 1,000,000 contracts. Volatility: ATR(14) > 0.5% of price.

Statistical Edge Metrics

Win rate: 45-50%. Avg win: 1.8R. Avg loss: 1R. Profit factor: 1.2-1.5. Expectancy: 0.2-0.3R.

Failure Conditions

False breakout (price re-enters channel quickly). Lack of follow-through volume. Reversal at key resistance/support.

Psychological Rules

Adhere to stop loss without hesitation. Do not chase trades. Accept losses as part of the process.

Advanced Components

Regime detection: use ADX to confirm trending environment. Filters: volume spike on breakout candle. Correlation: avoid correlated instruments breaking out simultaneously. MTF alignment: confirm 4-hour chart also shows consolidation.

Location

Strongest: At key support/resistance levels. Weakest: In the middle of a wide range.