Prior Day High/Low Level Trade

Entry Logic

Enter long on a confirmed retest and bounce from the prior day's high (PDH). Price must close above PDH on a 1-minute chart. Confirmation requires two consecutive 1-minute candles closing above PDH. Entry occurs within 5 points of PDH. Market exhibits trending behavior.

Exit Logic

Target 1: 1.2R. Target 2: 2.0R. Scale out 60% at Target 1. Trail remaining position with a 10-minute ATR stop. Exit entire position if price closes below the entry candle's low. Close trade at 3:45 PM EST. Exit if price fails to move 0.5R within 30 minutes.

Stop Loss Structure

Hard stop placed 0.6R below entry. Max dollar loss $400 per trade. Max percent loss 0.4% of account value. Structural stop placed below the retest swing low.

Risk Management Framework

Risk 0.2% of account per trade. Daily loss limit $1,200. Weekly loss limit $3,600. Max drawdown 8% of account. Minimum R:R for entry is 1.2:1.

Position Sizing Model

Size based on 0.2% account risk per trade. Adjust position size by 5% for every 0.25 point increase in 5-minute ATR. Increase size by 40% for A+ setups. Scale in once on a confirmed retest of the retest level.

Trade Filtering

Trade ES, NQ, RTY, YM. Avoid trading during low volatility periods (ATR below 1.0 for ES). Avoid trading on Mondays before 10:00 AM EST. Only trade during strong trending conditions.

Context Framework

Trend must be upward on 5-minute and 15-minute charts for long trades. Price must be above VWAP. Price must be above 50-period moving average. Entry occurs within the upper 20% of the prior day's range for long trades. Higher timeframe (30-minute) must show strong trend continuation.

Trade Management Rules

Move stop to breakeven after 0.8R profit. Scale out 60% at 1.2R. Never add to losing positions. Use aggressive stop management for fast-moving trades. Use time-based exits for slow-moving trades.

Time Rules

Optimal trading window: 9:45 AM EST - 11:30 AM EST and 1:30 PM EST - 3:00 PM EST. Avoid trading 12:00 PM EST - 1:00 PM EST. No trades during first 15 minutes of market open.

Setup Classification

A+: Strong retest and bounce from PDH with high volume, clear trend. A: Clear retest, moderate volume, 15-minute trend alignment. B: Weak retest, low volume, counter-trend on 5-minute chart. C: No clear retest, choppy price action.

Market Selection Criteria

Trade ES, NQ, RTY, YM. Minimum average daily range 1% of instrument price. Minimum daily volume 300,000 contracts.

Statistical Edge Metrics

Target win rate: 58%. Target average win: 1.8R. Target average loss: 0.6R. Target profit factor: 1.8. Expectancy: 0.6.

Failure Conditions

Price breaks back below PDH with high volume. No follow-through after entry. Market becomes choppy. Higher timeframe trend reverses.

Psychological Rules

Trust the process. Avoid revenge trading. Document all trades.

Advanced Components

Confirm PDH retest with order flow analysis (e.g., absorption). Look for divergence on MACD. Use 2-minute chart for finer entry timing.

Location

Strongest when price approaches PDH from above (for support) or below (for resistance) after a clear trend. Weakest during consolidation periods around PDH.