Globex Session Setup

Entry Logic

• Entry trigger: A key high or low is established during the Globex (overnight) session.
• Confirmation: The price tests this level during the regular trading hours and is rejected.
• Timeframe: 60-minute chart to identify the Globex levels, 5-minute chart for entry.
• Location context: The entry occurs at a significant Globex level that acts as strong support or resistance.
• Market condition: A market that respects Globex levels, often in a ranging environment.

Exit Logic

• Profit target: The other side of the daily range or a significant daily level.
• Scaling out: Not recommended.
• Trailing stop: A manual trail bar-by-bar on the 5-minute chart.
• Signal failure exit: Exit if the Globex level is decisively broken.
• Opposite signal exit: Not applicable.
• Time expiration: Exit by the end of the regular trading session.
• Momentum loss: Exit if the price stalls at the entry level.

Stop Loss Structure

• Hard stop: 40 cents beyond the Globex level.
• Soft stop: A close beyond the Globex level on the 5-minute chart.
• Max dollar loss: $500 per trade.
• Max percent loss: 1% of account capital.
• Structural stop: Beyond the high or low of the Globex session.

Risk Management Framework

• Risk per trade: 0.5% of account equity.
• Maximum daily loss limit: 2% of account equity.
• Maximum weekly loss limit: 5% of account equity.
• Maximum drawdown: 15% from peak equity.
• Risk-reward ratio: Minimum 2.5:1 required.

Position Sizing Model

• Sizing approach: Risk-based position sizing.
• Volatility adjustment: Not applicable.
• Conviction sizing: Not applicable.
• Scaling in: Not recommended.
• Scaling out: Not recommended.

Trade Filtering

• Market conditions to avoid: Strongly trending markets that are breaking through all levels.
• Specific setups required: A clear and significant Globex high or low.
• Stock/instrument requirements: Index futures (ES, NQ) and major currency pairs.
• Time of day restrictions: Trade during the first half of the regular trading session.
• Chop/news avoidance: Avoid trading around major news releases that could invalidate the Globex levels.

Context Framework

• Trend direction: Can be traded both with and against the daily trend, depending on the strength of the Globex level.
• VWAP relationship: The Globex level often aligns with the daily VWAP.
• Moving average relationship: The 200-period SMA on the 60-minute chart can add confluence to the Globex level.
• Range location: The trade is taken at the extremes of the daily range, which are often defined by the Globex session.
• Higher TF alignment: The daily chart should show that the Globex level is a significant area of support or resistance.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1.5R move.
• Scale out: Not applicable.
• Add size: Not applicable.
• Fast vs slow moves: Be patient and let the trade work its way to the profit target.

Time Rules

• Optimal window: 9:30 AM to 12:00 PM ET.
• Times to avoid: The afternoon session, when Globex levels are less relevant.
• Session notes: This strategy is particularly effective in the forex market.

Setup Classification

• A+ criteria: A very significant Globex level that has been tested multiple times, with a strong rejection during regular trading hours.
• A criteria: A clear Globex level with a good rejection.
• B criteria: A less-defined level or a weak rejection.
• C criteria: Avoid all other setups.

Market Selection Criteria

• Instrument requirements: Index futures and major currency pairs.
• Volume/liquidity: High volume is required.
• Volatility: Moderate volatility is ideal.

Statistical Edge Metrics

• Win rate: 65%.
• Avg win: 2.5R.
• Avg loss: 1R.
• Profit factor: 1.62.
• Expectancy: 0.62R per trade.

Failure Conditions

• The strategy fails when the market is in a strong trend and does not respect the Globex levels.
• Avoid on days with major, market-moving news.

Psychological Rules

• Have confidence in the significance of the Globex levels.
• Do not be afraid to take a trade that may be against the immediate momentum.

Advanced Components

• Regime detection: Not applicable.
• Filters: Not applicable.
• Correlation: Be aware of how related markets are reacting to the Globex levels.
• MTF alignment: The weekly chart should show that the Globex level is a major inflection point.

Location

• Strongest: In ranging markets where the boundaries are well-defined by the Globex session.
• Weakest: In strongly trending markets.