Volume Dry-Up Entry (Low Volume Pullback)

Entry Logic

• Enter long on a pullback to a key support level.
• Entry requires a significant decrease in volume on the pullback.
• Confirmation: A bullish reversal candle on low volume.
• Timeframe: 15-minute chart.
• Location: Entry must occur near a key support level.
• Market Condition: A strong uptrend.

Exit Logic

• Profit Target: The previous swing high.
• Scaling Out: Not recommended.
• Trailing Stop: A close below the 20-period EMA.
• Signal Failure: A close below the support level.
• Opposite Signal: A bearish engulfing candle with high volume.
• Time Expiration: End of the day.
• Momentum Loss: A failure to make a new high.

Stop Loss Structure

• Hard Stop: Below the low of the reversal candle.
• Soft Stop: A close below the support level.
• Max Dollar Loss: $75 per trade.
• Max Percent Loss: 0.75% of account.
• Structural Stop: Below the support level.

Risk Management Framework

• Risk Per Trade: 0.5% of account.
• Daily Limit: 4 losing trades.
• Weekly Limit: 6% drawdown.
• Max Drawdown: 18%.
• R:R Requirement: Minimum 1.5:1.

Position Sizing Model

• Sizing Approach: Fixed fractional.
• Volatility Adjustment: No adjustment needed.
• Conviction Sizing: Full size on A+ setups.
• Scaling In: Not recommended.
• Scaling Out: Not recommended.

Trade Filtering

• Market Conditions: Only trade in strong uptrends.
• Setups: Look for pullbacks to clear support levels.
• Instruments: High-volume stocks.
• Time Restrictions: No restrictions.
• Chop/News Avoidance: Avoid trading around news.

Context Framework

• Trend Direction: Must be in a clear uptrend.
• VWAP Relationship: Price should be above VWAP.
• MA Relationship: Price should be above the 50-period SMA.
• Range Location: Not applicable.
• Higher TF Alignment: The daily chart should be in an uptrend.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1R move.
• Scale Out: Not recommended.
• Add Size: Not recommended.
• Fast vs Slow Moves: Take profits at the target.

Time Rules

• Optimal Window: Any time during the day.
• Times to Avoid: None.
• Session Notes: Works well in all sessions.

Setup Classification

• A+ Setup: A clear pullback to support on very low volume.
• A Setup: A decent pullback with low volume.
• B Setup: A pullback with average volume.
• C Setup: Avoid pullbacks with high volume.

Market Selection Criteria

• Instruments: Stocks with a daily volume of over 1 million shares.
• Volume: Low volume on the pullback.
• Volatility: Moderate volatility.

Statistical Edge Metrics

• Win Rate: 55%.
• Avg Win: 1.5R.
• Avg Loss: 1R.
• Profit Factor: 0.825.
• Expectancy: -0.175R per trade.

Failure Conditions

• The strategy fails if the trend is not strong.
• Avoid trading if the pullback has high volume.

Psychological Rules

• Be patient and wait for the right setup.
• Do not be afraid to buy on low volume.

Advanced Components

• Regime Detection: Use a trend filter.
• Filters: Use a volume filter.
• Correlation: Avoid correlated instruments.
• MTF Alignment: Ensure higher timeframe alignment.

Location

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