4. Pivot Width Analysis Trade

Entry Logic

Enter long when price breaks above R1 on a narrow CPR day. Confirm with a 5-minute close above R1. Use 5-minute timeframe. Price must originate from within CPR. Market must be trending up.

Exit Logic

Target R2 or 1.5R. Scale out 50% at 0.75R. Trail stop below prior 5-minute low. Exit remaining position if price closes below R1. Exit at session close. Momentum loss? Exit.

Stop Loss Structure

Place hard stop 10 ticks below CPR bottom. Max dollar loss $175. Max 0.45% portfolio loss. Structural stop below the breakout candle low.

Risk Management Framework

Risk 0.8% per trade. Daily loss limit 2.75%. Weekly loss limit 6.5%. Require 2:1 R:R minimum.

Position Sizing Model

Size to risk 0.8% of capital. Volatility adjusts size; smaller size for higher ATR. Conviction sizing: A+ setups get 1.3% risk. Scale in rarely; only with strong confirmation.

Trade Filtering

Trade NQ, ES. Avoid wide CPR days. Avoid news. Only trade after 9:45 AM EST.

Context Framework

Trade with the daily trend. Price must be above VWAP. Price must be above 20-period EMA. Narrow CPR width is paramount. Higher timeframe shows clear direction.

Trade Management Rules

Move to breakeven after 0.5R profit. Scale out 50% at 1R. Do not add to losing positions. Fast moves require tighter stops.

Time Rules

Optimal entry 9:45 AM - 11:30 AM EST. Avoid 12:00 PM - 1:30 PM EST. Session close 3:45 PM EST.

Setup Classification

A+ setup: Very narrow CPR, strong break above R1, high volume, clear higher TF trend. A setup: Narrow CPR, good break, good volume, moderate higher TF trend. B setup: Average narrow CPR, decent break, average volume. C setup: Avoid.

Market Selection Criteria

Trade NQ, ES. Require average daily volume > 1M. Require ATR > 10 points.

Statistical Edge Metrics

Target 58% win rate. Average win 1.3R. Average loss 0.65R. Profit factor 1.4. Expectancy $28 per $100 risked.

Failure Conditions

Strategy fails if R1 break is false. Fails if volume is low. Fails if CPR is not narrow.

Psychological Rules

Be patient for narrow CPR days. Execute without hesitation. Manage risk diligently.

Advanced Components

Regime detection confirms trending market. Filter by CPR width. Correlation with SPY confirms NQ move. MTF alignment shows all timeframes trending.

Location

Strongest when R1 is tested from within a narrow CPR. Weakest when R1 is tested from far below after a wide CPR.