Passive Buyer/Seller Detection

Entry Logic

• Entry is a long position when a large number of passive buyers are detected on the bid side of the order book.
• Confirmation is the price holding a key support level.
• Timeframe is the 15-minute chart.
• Location is at a key support level.
• Market is in a range or an uptrend.

Exit Logic

• Profit target is the next resistance level.
• Scale out 50% at a 2:1 risk-reward ratio.
• Trail the stop loss below the low of the last 3 bars.
• Exit if the passive buyers disappear.
• Exit on a bearish reversal pattern.
• Exit if the price does not move up within 4 bars.
• Exit if buying momentum stalls.

Stop Loss Structure

• Hard stop is placed below the support level.
• Soft stop is when the passive buyers pull their bids.
• Maximum dollar loss is $200 per trade.
• Maximum percent loss is 2% of the account.
• Structural stop is below the support level.

Risk Management Framework

• Risk 1.5% of the account per trade.
• Daily loss limit is 4.5% of the account.
• Weekly loss limit is 9% of the account.
• Maximum drawdown is 25%.
• Risk-reward ratio must be at least 1:2.

Position Sizing Model

• Use a fixed fractional position sizing model.
• No volatility adjustment.
• Full size for all setups.
• Do not scale in.
• Scale out as per the exit logic.

Trade Filtering

• Avoid trading in strong downtrends.
• Only trade when there is clear passive buying at a key level.
• Trade only highly liquid instruments.
• Avoid trading during news events.
• Do not trade in choppy markets.

Context Framework

• Trend is sideways or up.
• Price is near or above VWAP.
• Price is consolidating near a support level.
• Location is at a key support level.
• The higher timeframe chart (60-minute) shows a consolidation or uptrend.

Trade Management Rules

• Move stop to breakeven after the first profit target is hit.
• Scale out at resistance levels.
• Do not add to the position.
• Let the trade run if passive buying remains strong.

Time Rules

• Optimal trading window is from 10:00 AM to 2:00 PM EST.
• Avoid trading in the last hour of the session.
• The strategy works best when the market is consolidating.

Setup Classification

• A+ setup: Large passive buying at a major support level with a clear hold.
• A setup: Moderate passive buying at a minor support level.
• B setup: Small passive buying with a weak hold.
• C setup: No clear passive buying.

Market Selection Criteria

• Trade ES, NQ, and ZN futures.
• High liquidity is essential.
• Moderate volatility is preferred.

Statistical Edge Metrics

• Expected win rate is 70%.
• Average win is 2R.
• Average loss is 1R.
• Profit factor is 1.4.
• Expectancy per trade is 0.4R.

Failure Conditions

• The strategy fails if the passive buyers are spoofing.
• Avoid trading when there is a strong bearish sentiment in the market.

Psychological Rules

• Be patient and wait for the price to test the support level.
• Trust the passive buyers to hold the line.

Advanced Components

• Use a DOM or an order book visualization tool to detect passive buyers.
• Use a volume profile to identify key support and resistance levels.
• Do not trade correlated instruments at the same time.
• The 60-minute chart should confirm the support level.

Location

• Strongest at well-established support and resistance levels.
• Weakest in the middle of a range.
• The location of the passive buying is a key factor in determining the trade's success.