Trend Continuation Market Structure

Entry Logic

• Entry trigger: In a strong trend, price makes a pullback to a key support level (e.g., 20 EMA, previous swing high) and forms a bullish continuation pattern (e.g., bull flag, ascending triangle).
• Confirmation: A breakout from the continuation pattern in the direction of the trend.
• Timeframe: 15-minute chart.
• Location context: In a strong, established trend.
• Market condition: Trending.

Exit Logic

• Profit target: The next major swing high.
• Scaling out: 50% at 2R.
• Trailing stop: Trail below the 15-minute 20 EMA.
• Signal failure exit: Exit if the continuation pattern fails.
• Opposite signal exit: Exit on a market structure shift.
• Time expiration: Exit if the trade is not profitable within 2 hours.
• Momentum loss: Exit if momentum fades.

Stop Loss Structure

• Hard stop: Below the low of the continuation pattern.
• Soft stop: Not used.
• Max dollar loss: $100 per trade.
• Max percent loss: 0.5% of account.
• Structural stop: The low of the continuation pattern.

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 2:1.

Position Sizing Model

• Sizing approach: Fixed fractional sizing.
• Volatility adjustment: Standard sizing.
• Conviction sizing: Full size for A+ setups.
• Scaling in: Not recommended.
• Scaling out: At 2R.

Trade Filtering

• Market conditions to avoid: Ranging markets.
• Setups required: A clear trend and a classic continuation pattern.
• Instruments: Any trending instrument.
• Time restrictions: High-volume sessions.
• Chop/news avoidance: Avoid around news.

Context Framework

• Trend direction: With the dominant trend.
• VWAP relationship: Price is above the VWAP.
• MA relationship: The 20 EMA is above the 50 SMA.
• Range location: Not a range trade.
• Higher TF alignment: The higher timeframes are also in a trend.

Trade Management Rules

• Breakeven: Move to breakeven at 1.5R.
• Scale out: At 2R.
• Add size: Not applicable.
• Fast vs slow moves: Let profits run.

Time Rules

• Optimal window: Any high-volume session.
• Times to avoid: Low-volume periods.
• Session notes: A bread-and-butter trend-following setup.

Setup Classification

• A+ criteria: A textbook continuation pattern in a strong trend.
• A criteria: A clear continuation pattern.
• B criteria: The pattern is not well-defined.
• C criteria: No clear trend.

Market Selection Criteria

• Instruments: Any liquid, trending instrument.
• Volume: High volume on the breakout.
• Volatility: Moderate.

Statistical Edge Metrics

• Win rate: 65%.
• Avg win: 2.5R.
• Avg loss: 1R.
• Profit factor: 1.625.
• Expectancy: 0.625R per trade.

Failure Conditions

• The continuation pattern fails, indicating a potential reversal.
• The trend is exhausted.

Psychological Rules

• Requires patience to wait for the pullback and pattern to form.
• Requires discipline to trade with the trend.

Advanced Components

• Regime detection: Use ADX to confirm a trending market.
• Filters: Not necessary.
• Correlation: Trade in the direction of the broader market.
• MTF alignment: Essential.

Location

• Strongest: In a strong, established trend.
• Weakest: In a ranging market.