Price Action + Order Flow + Volume Triple Confirmation

Entry Logic

• Long entry: A clear bullish price action pattern (e.g., hammer, engulfing) forms at a key support level. Order flow shows buyers absorbing sellers. Volume is significantly higher than average.
• Short entry: A clear bearish price action pattern (e.g., shooting star, engulfing) forms at a key resistance level. Order flow shows sellers absorbing buyers. Volume is significantly higher than average.
• Confirmation: Footprint chart shows trapped sellers at support for longs, or trapped buyers at resistance for shorts.
• Timeframe: 5-minute chart.
• Location: Key support or resistance levels.
• Market Condition: Any.

Exit Logic

• Profit Target: The next key support/resistance level or 2R.
• Scaling Out: Scale out 50% at 1R.
• Trailing Stop: Trail stop below the low of the previous candle.
• Signal Failure: Exit if price closes back below support for longs, or above resistance for shorts.
• Opposite Signal: Exit on a valid opposite signal.
• Time Expiration: Exit if the trade is not profitable within 2 hours.
• Momentum Loss: Exit if volume dries up and the move stalls.

Stop Loss Structure

• Hard Stop: Below the low of the entry candle for longs, above the high for shorts.
• Soft Stop: A close back beyond the key level.
• Max Dollar Loss: $100 per trade.
• Max Percent Loss: 0.5% of account.
• Structural Stop: Below the swing low for longs, above the swing high for shorts.

Risk Management Framework

• Risk Per Trade: 0.5% of account.
• Daily Limit: 3 losing trades.
• Weekly Limit: 4% drawdown.
• Max Drawdown: 8%.
• R:R Requirement: Minimum 2:1.

Position Sizing Model

• Sizing Approach: Fixed fractional, 0.5% of account at risk.
• Volatility Adjustment: Adjust size based on the distance to the stop loss.
• Conviction Sizing: A+ setups (perfect confluence of all three) get 0.75% risk.
• Scaling In: Not recommended.
• Scaling Out: Scale out 50% at 1R.

Trade Filtering

• Market Conditions: Avoid very low-volume, choppy markets.
• Setups: All three confirmations (Price Action, Order Flow, Volume) must be present.
• Instruments: Liquid stocks, futures, and forex.
• Time Restrictions: Any time.
• Chop/News Avoidance: Be cautious around major news events.

Context Framework

• Trend Direction: Trade with the higher timeframe trend for better probability.
• VWAP Relationship: Confluence with VWAP adds strength to the setup.
• MA Relationship: Confluence with a key moving average (50, 200) adds strength.
• Range Location: At the upper or lower boundaries of a range.
• Higher TF Alignment: Alignment with the 60-minute chart trend is preferred.

Trade Management Rules

• Breakeven: Move stop to breakeven after 1R of profit.
• Scale Out: Scale out 50% at 1R.
• Add Size: Not recommended.
• Fast vs Slow Moves: Take profits on fast moves, be patient with slow moves.

Time Rules

• Optimal Window: Any time, but setups are clearer during high-volume periods.
• Times to Avoid: Illiquid, pre-market and post-market sessions.
• Session Notes: Works in all major trading sessions.

Setup Classification

• A+ Setup: Perfect confluence of price action, order flow, and volume at a major level.
• A Setup: Good confluence of all three.
• B Setup: Only two of the three confirmations are present.
• C Setup: Only one or no confirmations.

Market Selection Criteria

• Instruments: ES, NQ, CL, GC, EUR/USD, and high-volume stocks.
• Volume: Must have sufficient liquidity for clean order flow analysis.
• Volatility: Moderate volatility is ideal.

Statistical Edge Metrics

• Win Rate: 60%.
• Avg Win: 2R.
• Avg Loss: 1R.
• Profit Factor: 1.8.
• Expectancy: 0.4R per trade.

Failure Conditions

• Market Conditions: Fails in extremely volatile, news-driven markets where levels are not respected.
• Specific Scenarios: Fails if order flow data is misleading (spoofing).

Psychological Rules

• Mental Discipline: Requires patience to wait for all three confirmations to align.

Advanced Components

• Regime Detection: Not critical for this strategy, as it works in most regimes.
• Filters: Use a volume profile to identify the most significant levels.
• Correlation: Be aware of correlations, but it is not a primary filter.
• MTF Alignment: Check the 15-minute and 60-minute charts for context.

Location

• Strongest: At major daily or weekly support and resistance levels.
• Weakest: At minor, insignificant intraday levels.