Prior Week High/Low Trade

Entry Logic

Enter short on a confirmed rejection of the prior week's high (PWH). Price must close below PWH on a 5-minute chart. Confirmation requires two consecutive 5-minute candles closing below PWH. Entry occurs within 15 points of PWH. Market exhibits bearish momentum.

Exit Logic

Target 1: 1.5R. Target 2: 2.5R. Scale out 50% at Target 1. Trail remaining position with a 15-minute ATR stop. Exit entire position if price closes above the entry candle's high. Close trade at 3:00 PM EST on Friday. Exit if price shows no downside movement for 45 minutes.

Stop Loss Structure

Hard stop placed 0.75R above entry. Max dollar loss $600 per trade. Max percent loss 0.6% of account value. Structural stop placed above the swing high preceding rejection.

Risk Management Framework

Risk 0.3% of account per trade. Daily loss limit $1,800. Weekly loss limit $5,400. Max drawdown 12% of account. Minimum R:R for entry is 1.5:1.

Position Sizing Model

Size based on 0.3% account risk per trade. Adjust position size by 15% for every 1.0 point increase in 15-minute ATR. Increase size by 60% for A+ setups. Scale in up to 2 times on confirmed retest of PWH rejection.

Trade Filtering

Trade ES, NQ, CL, GC, ZB. Avoid trading during low volume periods (e.g., summer holidays). Avoid trading on Mondays before 11:00 AM EST. Only trade during clear trending or reversal conditions.

Context Framework

Trend must be downward on 60-minute chart for short trades. Price must be below VWAP. Price must be below 200-period moving average. Entry occurs within the upper 10% of the prior week's range for short trades. Higher timeframe (Daily) must show resistance at or near PWH.

Trade Management Rules

Move stop to breakeven after 1R profit. Scale out 50% at 1.5R. Do not add to losing positions. Manage fast moves with tight trailing stops. Manage slow moves with wider time-based stops.

Time Rules

Optimal trading window: Tuesday - Thursday, 10:00 AM EST - 12:00 PM EST. Avoid trading Friday afternoons. No trades on Monday mornings.

Setup Classification

A+: Clear rejection of PWH with high volume, strong bearish higher timeframe trend. A: Moderate rejection, moderate volume, 60-minute trend alignment. B: Weak rejection, low volume, no clear higher timeframe trend. C: Counter-trend entry, high risk, no volume confirmation.

Market Selection Criteria

Trade ES, NQ, CL, GC, ZB. Minimum average weekly range 2% of instrument price. Minimum daily volume 750,000 contracts for futures.

Statistical Edge Metrics

Target win rate: 52%. Target average win: 2.2R. Target average loss: 0.8R. Target profit factor: 1.4. Expectancy: 0.4.

Failure Conditions

Price breaks above PWH with high volume. No bearish follow-through. Market turns choppy. Higher timeframe trend reverses.

Psychological Rules

Be patient. Wait for confirmation. Do not overtrade.

Advanced Components

Use volume profile to identify resistance clusters at PWH. Look for bearish divergence on 60-minute RSI. Confirm rejection with candlestick patterns (e.g., engulfing).

Location

Strongest when PWH acts as resistance after a prolonged uptrend. Weakest when PWH is near the middle of the current week's range.