British Pound Brexit/Macro Trade

Entry Logic

• Exact Entry Trigger: Enter long British Pound futures (6B) on positive news regarding Brexit or the UK economy. Enter short on negative news.
• Confirmation: The news should be a significant development that is likely to have a lasting impact on the pound.
• Timeframe: 4-hour chart.
• Location Context: Not applicable.
• Market Condition: A market that is sensitive to Brexit-related news and UK economic data.

Exit Logic

• Profit Targets: A fixed target of 150 ticks.
• Scaling Out: Not recommended.
• Trailing Stop: Trail the stop loss below a recent swing low for longs, or above a recent swing high for shorts.
• Signal Failure Exit: Exit if the market's reaction to the news is short-lived.
• Opposite Signal Exit: Not applicable.
• Time Expiration: Exit the trade within a week.
• Momentum Loss: Not applicable.

Stop Loss Structure

• Hard Stop: A fixed stop of 75 ticks from the entry price.
• Soft Stop: Not used.
• Max Dollar Loss: $468.75 per contract.
• Max Percent Loss: 0.46875% of account capital.
• Structural Stop: Not applicable.

Risk Management Framework

• Risk Per Trade: 0.5% of account capital.
• Maximum Daily Loss Limit: 2% of account capital.
• Maximum Weekly Loss Limit: 5% of account capital.
• Maximum Drawdown: 10% from peak equity.
• R:R Requirement: 2:1 risk-reward ratio.

Position Sizing Model

• Sizing Approach: Fixed contract size.
• Volatility Adjustment: Not applicable.
• Conviction Sizing: Not applicable.
• Scaling In: Not recommended.
• Scaling Out: Not recommended.

Trade Filtering

• Market Conditions to Avoid: A market that is not focused on Brexit or the UK economy.
• Specific Setups Required: A significant development in the Brexit negotiations or a major UK economic data release.
• Instruments: 6B (British Pound futures).
• Time Restrictions: Can be traded at any time.
• Chop/News Avoidance: This is a news-driven trade.

Context Framework

• Trend Direction: Not applicable.
• VWAP Relationship: Not applicable.
• MA Relationship: Not applicable.
• Range Location: Not applicable.
• Higher TF Alignment: Not applicable.

Trade Management Rules

• Breakeven: Move stop to breakeven after the price has moved 75 ticks in your favor.
• Scale Out: Not applicable.
• Add Size: Not recommended.
• Fast vs Slow Moves: This is a slow-moving strategy. Be patient.

Time Rules

• Optimal Trading Window: Following a major Brexit-related announcement or UK economic data release.
• Times to Avoid: When the market is waiting for the next development.
• Session Notes: This strategy can be traded in any session.

Setup Classification

• A+ Setup: A major breakthrough or breakdown in the Brexit negotiations.
• A Setup: A significant piece of UK economic data.
• B Setup: A minor development in the Brexit saga.
• C Setup: Avoid. No significant news.

Market Selection Criteria

• Instruments: 6B (British Pound futures).
• Volume/Liquidity: High volume and liquidity are essential.
• Volatility: High volatility is preferred.

Statistical Edge Metrics

• Win Rate: 50-55%.
• Avg Win: 2.5R.
• Avg Loss: 1R.
• Profit Factor: 1.25.
• Expectancy: 0.25R per trade.

Failure Conditions

• When Strategy Fails: When the market does not react to the news as expected or when other factors are driving the currency market.
• Specific Scenarios to Avoid: Trading this strategy when the news is ambiguous or already priced in.

Psychological Rules

• Mental Discipline: Have a good understanding of the political and economic situation in the UK. Do not trade based on rumors or speculation.

Advanced Components

• Regime Detection: Not applicable.
• Filters: Monitor the news headlines for Brexit-related developments.
• Correlation: This strategy is based on the correlation between news and the British Pound.
• MTF Alignment: Not applicable.

Location

• Where Strongest: When the market is highly focused on Brexit and the UK economy.
• Where Weakest: When other factors, such as global risk sentiment, are driving the currency market.