2. Growth vs Value Rotation

Entry Logic

Trigger: Relative Strength (RS) line of Growth ETF (QQQ) crossing above Value ETF (VTV) on 4-hour chart. Confirmation: QQQ 4-hour close above 50-period simple moving average (SMA). Timeframe: 4-hour for trigger, 1-hour for entry refinement. Location Context: RS line crossing above 20-period SMA on 4-hour chart. Market Condition: Interest rate stability, improving economic outlook.

Exit Logic

Profit Target: QQQ reaches 2.0 ATR from entry. Scaling Out: 30% position at 1 ATR profit, 40% at 1.5 ATR. Trailing Stop: 0.75 ATR below highest close. Signal Failure: RS line of QQQ drops below VTV. Time Expiration: No open position after 5 trading days. Momentum Loss: QQQ 1-hour RSI drops below 30.

Stop Loss Structure

Hard Stop: 1.0 ATR below entry price. Soft Stop: QQQ daily close below 50-DMA. Max Dollar Loss: $750 per trade. Max Percent Loss: 2% of trading capital. Structural Stop: QQQ breaks below prior swing low on 4-hour chart.

Risk Management Framework

Risk Per Trade: 1.5% of capital. Daily Limit: 4% capital loss. Weekly Limit: 9% capital loss. Max Drawdown: 20% of capital. R:R Requirement: Minimum 2:1.

Position Sizing Model

Sizing Approach: Fixed dollar risk. Volatility Adjustment: Use 4-hour ATR for share size. Conviction Sizing: 2% risk for A+ setups with strong sector news. Scaling In/Out: Scale out at profit targets. Never scale into a losing trade.

Trade Filtering

Market Conditions: Inflation expectations stable. Setups: Clear RS line crossover. Instruments: QQQ, VTV. Time Restrictions: Avoid trading during Federal Reserve speeches. Chop/News Avoidance: Avoid earnings season for major QQQ holdings.

Context Framework

Trend Direction: Growth sector strengthening. VWAP Relationship: QQQ above VWAP on 4-hour. MA Relationship: QQQ 4-hour above 20 and 50 SMA. Range Location: QQQ breaking out of 4-hour consolidation. Higher TF: Weekly QQQ chart shows strength.

Trade Management Rules

Breakeven: Move stop to entry after 0.75 ATR profit. Scale Out: 30% at 1 ATR, 40% at 1.5 ATR, rest at 2 ATR. Add Size: Never. Fast vs Slow Moves: Adjust trailing stop aggressiveness.

Time Rules

Optimal Window: 10:00 AM - 12:00 PM EST. Times to Avoid: Market close. Session Notes: Mid-day often sees sustained moves.

Setup Classification

A+ Criteria: RS line crossover with high volume, strong economic data supporting growth. A Criteria: Clear RS line crossover, moderate volume. B Criteria: Weak crossover, low volume. C Criteria: Avoid.

Market Selection Criteria

Instruments: QQQ, VTV. Volume: Average daily volume > 75 million shares. Volatility: ATR 4-hour > 1%.

Statistical Edge Metrics

Win Rate: 50%. Avg Win: $1500. Avg Loss: $750. Profit Factor: 2.0. Expectancy: $375 per trade.

Failure Conditions

Strategy Fails: Unexpected interest rate hikes. Persistent inflation fears.

Psychological Rules

Mental Discipline: Do not chase moves. Respect stop orders. Avoid overtrading.

Advanced Components

Regime Detection: Monitor bond yields for regime shifts. Filters: Volume confirmation on RS line crossover. Correlation: Monitor correlation between QQQ and VTV. MTF Alignment: Weekly, daily, 4-hour charts must align for growth strength.

Location

Strongest: Early economic expansion. Weakest: Stagflation environments.