9 EMA Pullback Long

Entry Logic

• Entry trigger: Price pulls back and touches the 9 EMA after a sustained uptrend.
• Confirmation: A bullish candlestick pattern (e.g., hammer, engulfing) forms on the 9 EMA touch.
• Timeframe: 5-minute chart.
• Location context: Price is above the 50 SMA and VWAP.
• Market condition: Strong trending market.

Exit Logic

• Profit target: 2R or the next significant resistance level.
• Scaling out: Scale out 50% at 1R, move stop to breakeven.
• Trailing stop: Trail stop below the 9 EMA.
• Signal failure: Exit if price closes below the 9 EMA.
• Opposite signal: Exit on a 9 EMA pullback short signal.
• Time expiration: Exit if the trade is not profitable within 60 minutes.
• Momentum loss: Exit if momentum indicators (e.g., RSI) show divergence.

Stop Loss Structure

• Hard stop: 1 ATR below the entry candle's low.
• Soft stop: A close below the 9 EMA.
• Max dollar loss: $100 per trade.
• Max percent loss: 1% of account.
• Structural stop: Below the most recent swing low.

Risk Management Framework

• Risk per trade: 0.5% of account.
• Daily limit: 3 losing trades.
• Weekly limit: 5% drawdown.
• Max drawdown: 15%.
• R:R requirement: Minimum 1.5:1.

Position Sizing Model

• Sizing approach: Fixed fractional (0.5% of account).
• Volatility adjustment: Reduce size if ATR is 50% above its 20-period average.
• Conviction sizing: A+ setups get 1% risk.
• Scaling in: Not recommended.
• Scaling out: At 1R and 2R.

Trade Filtering

• Market conditions: Avoid choppy, range-bound markets.
• Setups: Only take setups with clear trend alignment.
• Instruments: High-volume ETFs and large-cap stocks.
• Time restrictions: Avoid trading during the first 15 minutes of the market open.
• Chop/news avoidance: Do not trade around major news events.

Context Framework

• Trend direction: Uptrend confirmed by higher highs and higher lows.
• VWAP relationship: Price is above VWAP.
• MA relationship: 9 EMA is above the 20 EMA, which is above the 50 SMA.
• Range location: Trade is taken in the upper half of the daily range.
• Higher TF alignment: 1-hour and 4-hour charts show a clear uptrend.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1R move.
• Scale out: At 1R and 2R.
• Add size: Not recommended.
• Fast vs slow moves: Let winners run in fast moves; take profits sooner in slow moves.

Time Rules

• Optimal window: 9:45 AM - 11:00 AM EST.
• Times to avoid: Lunchtime (12:00 PM - 2:00 PM EST).
• Session notes: Strongest in the morning session.

Setup Classification

• A+ setup: Perfect 9 EMA touch with a strong bullish candle, all context aligned.
• A setup: Good setup with most context aligned.
• B setup: Decent setup, but some context is missing.
• C setup: Avoid.

Market Selection Criteria

• Instruments: SPY, QQQ, AAPL, MSFT.
• Volume: Minimum 1 million shares traded daily.
• Volatility: ATR should be at least 0.5% of the stock price.

Statistical Edge Metrics

• Win rate: 55%.
• Avg win: 1.5R.
• Avg loss: 1R.
• Profit factor: 1.2.
• Expectancy: 0.2R.

Failure Conditions

• Strategy fails in choppy, range-bound markets.
• Avoid when the 9 EMA is flat or pointing down.

Psychological Rules

• Be patient and wait for the price to come to you.
• Do not chase the price.

Advanced Components

• Regime detection: Use a 200-period SMA to identify the long-term trend.
• Filters: Avoid taking trades if the VIX is above 30.
• Correlation: Avoid taking trades on highly correlated assets at the same time.
• MTF alignment: Ensure the 1-hour and 4-hour charts are in an uptrend.

Location

• Strongest: In a strong, established uptrend.
• Weakest: In a choppy, range-bound market.