Ehlers Instantaneous Trendline

Entry Logic

• Exact Entry Trigger: Enter long when price crosses and closes above the Instantaneous Trendline. Enter short when price crosses and closes below it.
• Confirmation: The trendline should be clearly sloping up for longs and down for shorts.
• Timeframe: 60-minute, Daily.
• Market Condition: Trending.

Exit Logic

• Profit Targets: Exit on a close on the opposite side of the trendline.

Stop Loss Structure

• Hard Stop: The trendline itself acts as the stop loss.

Risk Management Framework

• Risk Per Trade: Determined by the distance from entry to the trendline.

Position Sizing Model

• Sizing Approach: Volatility-based sizing.

Trade Filtering

• Market Conditions to Avoid: Sideways markets where the trendline is flat.

Context Framework

• Trend Direction: The slope of the trendline defines the trend.

Trade Management Rules

• Let Profits Run: Stay with the trade as long as price respects the trendline.

Time Rules

• Session Notes: A swing trading system.

Setup Classification

• A+ Setup: The entry signal occurs after a prolonged period of trendline flattening.

Market Selection Criteria

• Instruments: Any trending instrument.

Statistical Edge Metrics

• Win Rate: 40-50%.
• Profit Factor: 2.0.
• Expectancy: 0.5R.

Failure Conditions

• Strategy Fails: In choppy, non-trending markets.

Psychological Rules

• Discipline: Follow the system mechanically.

Advanced Components

• Filters: Use a longer-term moving average to confirm the primary trend direction.

Location

• Strongest: In markets with smooth, cyclical trends.