Monthly Level + Weekly Trend + Daily Entry

Entry Logic

• Entry trigger: Daily chart shows a breakout of a 3-day consolidation.
• Confirmation: Weekly chart is in an uptrend, and price is at a monthly support level.
• Timeframe: Monthly for levels, weekly for trend, daily for entry.
• Location: Entry taken near the monthly support level.
• Market condition: Long-term uptrend with a pullback to a key level.

Exit Logic

• Profit target: The next major resistance level on the weekly chart.
• Scaling out: Scale out 33% at 2R, 33% at 4R, and let the rest run.
• Trailing stop: Trail stop below the weekly 10 EMA.
• Signal failure: Exit if the weekly chart closes below the monthly support level.
• Opposite signal: Exit on a bearish engulfing candle on the weekly chart.
• Time expiration: This is a long-term position trade.
• Momentum loss: Exit if the weekly chart shows declining volume for 3 consecutive weeks.

Stop Loss Structure

• Hard stop: Below the low of the daily entry consolidation.
• Soft stop: A close below the monthly support level.
• Max dollar loss: $500 per trade.
• Max percent loss: 2% of account.
• Structural stop: Below the most recent swing low on the weekly chart.

Risk Management Framework

• Risk per trade: 2% of account.
• Daily limit: Not applicable for position trading.
• Weekly limit: 5% drawdown.
• Max drawdown: 15%.
• R:R requirement: Minimum 4:1.

Position Sizing Model

• Sizing approach: Fixed fractional, 2% of account per trade.
• Volatility adjustment: Adjust size based on the monthly ATR.
• Conviction sizing: Not used in this strategy.
• Scaling in: Not used in this strategy.
• Scaling out: At 2R, 4R, and a final target.

Trade Filtering

• Market conditions: Avoid taking trades in the middle of a monthly range.
• Setups: Only take trades at key monthly support or resistance levels.
• Instruments: Major stock indices and blue-chip stocks.
• Time restrictions: Not applicable for position trading.
• Chop/news avoidance: Be aware of major macroeconomic events.

Context Framework

• Trend direction: The monthly chart should show a clear uptrend.
• VWAP relationship: Not applicable for this timeframe.
• MA relationship: The weekly 20 SMA should be above the 50 SMA.
• Range location: Entry taken at the edge of the monthly range.
• Higher TF alignment: Monthly and quarterly charts should be in alignment.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 2R move.
• Scale out: At 2R and 4R profit targets.
• Add size: Not used in this strategy.
• Fast vs slow moves: Hold through both fast and slow moves.

Time Rules

• Optimal window: Not applicable for position trading.
• Times to avoid: Not applicable for position trading.
• Session notes: Not applicable for position trading.

Setup Classification

• A+ setup: Perfect alignment of monthly level, weekly trend, and daily entry.
• A setup: Monthly level and weekly trend are good, but daily entry is not ideal.
• B setup: Monthly level is not as clear.
• C setup: No clear monthly level.

Market Selection Criteria

• Instruments: SPX, DJIA, AAPL, GOOGL.
• Volume: High daily volume.
• Volatility: Moderate volatility.

Statistical Edge Metrics

• Win rate: 40%.
• Avg win: 6R.
• Avg loss: 1R.
• Profit factor: 2.4.
• Expectancy: 1.4R per trade.

Failure Conditions

• Strategy fails when the monthly level does not hold.
• Avoid taking trades if the weekly trend is not clear.

Psychological Rules

• Extreme patience is required to wait for this long-term setup.
• Strong conviction is needed to hold the trade for a large move.

Advanced Components

• Regime detection: Use the quarterly chart to identify the overall market regime.
• Filters: Avoid taking trades if the monthly chart is in a strong downtrend.
• Correlation: Ensure the broader market is also showing strength.
• MTF alignment: Quarterly, monthly, and weekly charts should all be in alignment.

Location

• Strongest: At major monthly support and resistance levels.
• Weakest: In the middle of a monthly range.