Morning Momentum Window (9:30-10:30)

Entry Logic

• Entry trigger: Pullback to the 9 EMA on the 5-minute chart.
• Confirmation: Bullish or bearish engulfing candle at the 9 EMA.
• Timeframe: 5-minute chart.
• Location context: Trade in the direction of the opening 30-minute trend.
• Market condition: Strong trending market from the open.

Exit Logic

• Profit target: Previous high/low or 2R.
• Scaling out: Scale out 50% at the previous high/low.
• Trailing stop: Trail the remaining position with the 20 EMA.
• Signal failure exit: Exit if the price closes on the wrong side of the 9 EMA.
• Opposite signal exit: Exit on a confirmed reversal signal.
• Time expiration: Exit all trades by 11:00 AM EST.
• Momentum loss: Exit if the trend starts to consolidate for more than 3 candles.

Stop Loss Structure

• Hard stop: 1 tick below the low of the entry candle for long, 1 tick above for short.
• Soft stop: Not used.
• Max dollar loss: $120 per trade.
• Max percent loss: 0.6% of account.
• Structural stop: Below the most recent swing low for longs, above the most recent swing high for shorts.

Risk Management Framework

• Risk per trade: 0.6% of account.
• Daily limit: 3 losing trades.
• Weekly limit: 6% drawdown.
• Max drawdown: 18%.
• R:R requirement: Minimum 1.8:1.

Position Sizing Model

• Sizing approach: Fixed fractional.
• Volatility adjustment: Adjust size based on the ATR of the 5-minute chart.
• Conviction sizing: A+ setups get full size, A setups get half size.
• Scaling in/out: No scaling in.

Trade Filtering

• Market conditions: Avoid choppy, range-bound markets.
• Setups: Only trade pullbacks to the 9 EMA.
• Instruments: High-beta stocks and ETFs.
• Time restrictions: Only trade between 9:30 and 10:30 AM EST.
• Chop/news avoidance: Avoid trading on days with major economic data releases.

Context Framework

• Trend direction: Align with the 30-minute chart trend.
• VWAP relationship: Enter long above VWAP, short below VWAP.
• Moving average relationship: Price above the 20 and 50 EMAs for longs, below for shorts.
• Range location: Trade in the direction of the breakout from the opening range.
• Higher TF alignment: 60-minute trend confirms the trade direction.

Trade Management Rules

• Breakeven: Move stop to breakeven after 1.5R of profit.
• Scale out: At 2R and 3R.
• Add size: Not applicable.
• Fast vs slow moves: Let fast moves run, take partial profits on slow moves.

Time Rules

• Optimal window: 9:30-10:30 AM EST.
• Times to avoid: After 10:30 AM EST.
• Session notes: This strategy is most effective on strong trend days.

Setup Classification

• A+ criteria: Perfect pullback to the 9 EMA with strong volume confirmation.
• A criteria: Clean pullback with good volume.
• B criteria: Pullback with average volume.
• C criteria: Pullback with low volume (avoid).

Market Selection Criteria

• Instruments: NASDAQ 100 stocks.
• Volume: Minimum 2 million shares traded daily.
• Volatility: ATR on the 15-minute chart should be at least 1% of the stock price.

Statistical Edge Metrics

• Win rate: 55%.
• Avg win: 2R.
• Avg loss: 1R.
• Profit factor: 1.1.
• Expectancy: 0.1R per trade.

Failure Conditions

• Strategy fails when the market reverses sharply.
• Avoid when the trend is weak or non-existent.

Psychological Rules

• Trust the trend and avoid counter-trend trading.
• Do not chase entries if you miss the pullback.

Advanced Components

• Regime detection: Use the ADX indicator to confirm trend strength.
• Filters: Filter trades using a lower timeframe for more precise entries.
• Correlation: Be aware of sector and market correlations.
• MTF alignment: 30-minute and 60-minute charts should align with the trade direction.

Location

• Strongest: In a strong, established trend.
• Weakest: In a choppy, sideways market.