Moving Average Slope Change Entry

Entry Logic

• Entry trigger: The slope of a moving average (e.g., 20-period SMA) changes from negative to positive (for longs) or positive to negative (for shorts).
• Confirmation: A candle closes in the direction of the new slope.
• Timeframe: 30-minute chart.
• Location context: The slope change occurs after a period of consolidation or a pullback.
• Market condition: A new trend is potentially starting.

Exit Logic

• Profit target: 2R or the next significant support/resistance level.
• Scaling out: Not recommended.
• Trailing stop: Trail the stop on the other side of the moving average.
• Signal failure: Exit if the slope changes back.
• Opposite signal: Exit on a slope change in the opposite direction.
• Time expiration: None.
• Momentum loss: Exit if momentum fades.

Stop Loss Structure

• Hard stop: Below the low of the candle that confirmed the slope change (for longs) or above the high (for shorts).
• Soft stop: A close that negates the slope change.
• Max dollar loss: $150 per trade.
• Max percent loss: 1.5% of account.
• Structural stop: Below the recent swing low (for longs) or above the swing high (for shorts).

Risk Management Framework

• Risk per trade: 1% of account.
• Daily limit: 3 losing trades.
• Weekly limit: 5% drawdown.
• Max drawdown: 15%.
• R:R requirement: Minimum 1.5:1.

Position Sizing Model

• Sizing approach: Fixed fractional (1% of account).
• Volatility adjustment: Adjust size based on ATR.
• Conviction sizing: None.
• Scaling in: Not recommended.
• Scaling out: Not recommended.

Trade Filtering

• Market conditions: Avoid choppy, sideways markets.
• Setups: Only take trades on clear slope changes.
• Instruments: Any liquid instrument.
• Time restrictions: None.
• Chop/news avoidance: Avoid trading around major news.

Context Framework

• Trend direction: A new trend is potentially starting.
• VWAP relationship: The slope change should be in the direction of VWAP.
• MA relationship: The slope of the moving average is the key indicator.
• Range location: The trade is taken on a potential breakout of a range.
• Higher TF alignment: The higher timeframe chart should confirm the potential new trend.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1R move.
• Scale out: Not recommended.
• Add size: Not recommended.
• Fast vs slow moves: Let the trade run if a new trend develops.

Time Rules

• Optimal window: Any time a new trend is potentially starting.
• Times to avoid: Choppy, non-trending periods.
• Session notes: Works well in all sessions.

Setup Classification

• A+ setup: A sharp slope change with a strong confirmation candle.
• A setup: A decent slope change.
• B setup: A weak slope change.
• C setup: Avoid.

Market Selection Criteria

• Instruments: Any liquid instrument.
• Volume: High.
• Volatility: Moderate.

Statistical Edge Metrics

• Win rate: 50%.
• Avg win: 2R.
• Avg loss: 1R.
• Profit factor: 1.0.
• Expectancy: 0.0R.

Failure Conditions

• The strategy fails when the slope change is a false signal.
• Avoid taking trades if the slope change is not clear.

Psychological Rules

• Be patient and wait for the slope change.
• Do not anticipate the change.

Advanced Components

• Regime detection: Use a longer-term moving average to confirm the trend direction.
• Filters: Only take trades in the direction of the longer-term trend.
• Correlation: Be aware of market correlations.
• MTF alignment: Check the higher timeframe chart for confirmation.

Location

• Strongest: At the beginning of a new trend.
• Weakest: In a choppy, sideways market.