Floor Trader Pivot System

Entry Logic

Enter long when price retests the central pivot (PP) from above and shows bullish rejection. Confirm with a hammer or bullish engulfing candle on the 5-minute chart. Price must be above the 20-period EMA. Market must be in an established trend.

Exit Logic

Target R1, then R2. Scale out 40% at R1. Trail stop using a 15-period EMA on a 5-minute chart. Exit remaining position if the 15-period EMA is breached or a large bearish candle forms. Close all positions 15 minutes before the close.

Stop Loss Structure

Place hard stop 7 ticks below the central pivot (PP). Max dollar loss is $90. Max percent loss is 0.45% of account. Structural stop is below the rejection candle's low.

Risk Management Framework

Risk 0.8% of account per trade. Daily loss limit is 2.8% of account. Weekly loss limit is 5.5% of account. Max drawdown is 9%. Require a minimum 1.6:1 R:R.

Position Sizing Model

Size based on fixed dollar risk. Adjust size down 10% for instruments with high overnight gap risk. Scale up 5% for trades with strong conviction. Scale in 50% on initial entry, 50% on confirmation of rejection.

Trade Filtering

Trade large-cap stocks with good liquidity. Volume must be above 1.5 million shares. Avoid trading during the first 30 minutes of the market open. Avoid instruments with low daily range.

Context Framework

Trade in the direction of the 30-minute trend. Price must be above the daily VWAP. Look for the 60-minute chart to confirm the trend direction. Price should be making higher highs and higher lows.

Trade Management Rules

Move stop to breakeven when price moves 0.8R in profit. Scale out 50% at 1.5R. Do not add to trades that are consolidating. Be decisive with stop adjustments.

Time Rules

Optimal trading window is 9:45 AM to 11:45 AM EST. Avoid trading during the lunch hour. Avoid trading 30 minutes before market close.

Setup Classification

A+: Price retests PP with strong bullish rejection. High volume. Clear trend. A: Price retests PP with good rejection. Moderate volume. Established trend. B: Price retests PP with weaker rejection. Average volume. Emerging trend. C: Weak retest, poor rejection, low volume. Avoid.

Market Selection Criteria

Focus on highly liquid indices or their components (e.g., SPY, QQQ). Average daily volume must exceed 2 million shares. ATR must be at least 0.8% of the instrument's price.

Statistical Edge Metrics

Target 60% win rate. Average win $140. Average loss $90. Profit factor 2.0. Expectancy $49 per trade.

Failure Conditions

Price breaks below the central pivot after retest. Rejection candle is weak or invalidated. Market condition shifts to choppy. Trend reversal on higher timeframes.

Psychological Rules

Stay patient for the best setups. Do not over-analyze. Trust your entry signals. Manage risk consistently.

Advanced Components

Use stochastic oscillator for overbought/oversold confirmation at the pivot. Filter for instruments with strong relative strength. Check for confluence with 200-period SMA on 15-minute chart.

Location

Strongest when PP acts as support in an uptrend or resistance in a downtrend. Weakest when price is consolidating tightly around PP.