Ultimate Oscillator Trade

Entry Logic

• Exact Entry Trigger: Enter long on a bullish divergence where price makes a lower low but the Ultimate Oscillator makes a higher low (with the first low below 30).
• Confirmation: The oscillator must then rise above the high point of the divergence.
• Timeframe: 60-minute, Daily.
• Market Condition: Potential trend reversal.

Exit Logic

• Profit Targets: Exit when the oscillator reaches the 70 level.

Stop Loss Structure

• Hard Stop: Place stop below the low of the divergence pattern.

Risk Management Framework

• Risk Per Trade: 1% of account capital.
• R:R Requirement: Minimum 2:1.

Position Sizing Model

• Sizing Approach: Fixed fractional.

Trade Filtering

• Market Conditions to Avoid: Strong trending markets.

Context Framework

• Higher TF Alignment: The reversal should be supported by higher timeframe context.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1R move.

Time Rules

• Optimal Window: Near market turning points.

Setup Classification

• A+ Setup: A multi-bar divergence at a major support level.

Market Selection Criteria

• Instruments: Any liquid instrument.

Statistical Edge Metrics

• Win Rate: 50-60%.
• Profit Factor: 1.8.
• Expectancy: 0.4R.

Failure Conditions

• Strategy Fails: In powerful, one-directional trends.

Psychological Rules

• Discipline: Wait for the full confirmation of the divergence breakout before entering.

Advanced Components

• Filters: Combine with candlestick patterns.

Location

• Strongest: At the exhaustion of a downtrend.