Dark Pool Percentage Signal

Entry Logic

• Exact Entry Trigger: A stock shows a dark pool percentage of total volume above 50% for several consecutive days, combined with a rising price.
• Confirmation: A large, single dark pool print ($10M+) occurs near the end of the day.
• Timeframe: Daily chart for the signal, 60-minute for entry.
• Location Context: The stock is quietly accumulating above a major support level or moving average.
• Market Condition: Low-volatility, ranging, or slowly trending market.

Exit Logic

• Profit Target(s): A 10-15% move, or until a high-volume public market breakout occurs.
• Scaling Out: Sell 1/3 at 5%, 1/3 at 10%, trail the rest.
• Trailing Stop: A close below the 20-day EMA.
• Signal Failure: The stock breaks below the accumulation support level.
• Opposite Signal: A large increase in public market selling volume.
• Time Expiration: 4-6 weeks.
• Momentum Loss: Dark pool volume dries up and the stock goes quiet.

Stop Loss Structure

• Hard Stop: 6% below entry.
• Soft Stop: A close below the low of the accumulation range.
• Maximum Dollar Loss: $600 per trade.
• Maximum Percent Loss: 6% of the trade value.
• Structural Stop: Below the support level where accumulation is occurring.

Risk Management Framework

• Risk Per Trade: 0.75% of the account.
• Maximum Daily Loss: Not applicable.
• Maximum Weekly Loss: Not applicable.
• Maximum Drawdown: 15% of the account.
• R:R Requirement: Minimum 2:1.

Position Sizing Model

• Sizing Approach: Volatility-adjusted sizing.
• Volatility Adjustment: Use ATR to normalize risk.
• Conviction Sizing: Full size for A+ setups with clear, large prints.
• Scaling In: Can add to the position if more large prints confirm the thesis.
• Scaling Out: As per exit logic.

Trade Filtering

• Market Conditions to Avoid: High-volatility, news-driven markets where institutional players are less active.
• Specific Setups: Look for 'quiet' accumulation, not post-news reactions.
• Instrument Requirements: Mid to large-cap stocks, as they are the focus of institutional flow.
• Time Restrictions: None.
• Chop/News Avoidance: Avoid entering right before earnings.

Context Framework

• Trend Direction: Can be range-bound or in a slow uptrend.
• VWAP Relationship: Often trades around the yearly or quarterly VWAP.
• MA Relationship: Accumulation often occurs above the 200-day or 50-day SMA.
• Range Location: In the middle or lower end of a defined range.
• Higher TF Alignment: Weekly chart should show stability or the start of a turn.

Trade Management Rules

• Breakeven: Move stop to entry after a 5% gain.
• Scale Out: At predefined targets.
• Add Size: On dips, if the accumulation pattern continues.
• Fast vs Slow Moves: This is a slow strategy. The goal is to be positioned before the fast move happens.

Time Rules

• Optimal Window: Any time the signal appears.
• Times to Avoid: Pre-earnings.
• Session Notes: Pay attention to end-of-day prints.

Setup Classification

• A+ Criteria: Sustained high dark pool percentage (>50%), multiple large prints, and a clear support level.
• A Criteria: High dark pool percentage and a rising price.
• B Criteria: A single large print without sustained high dark pool volume.
• C Criteria: Avoid.

Market Selection Criteria

• Instruments: Mid to large-cap common stocks.
• Volume/Liquidity: Minimum 1 million shares average daily volume.
• Volatility: Low to moderate.

Statistical Edge Metrics

• Expected Win Rate: 50-60%.
• Average Win Size: 10-20%.
• Average Loss Size: 5-7%.
• Profit Factor: 2.0+.
• Expectancy: Positive.

Failure Conditions

• Market Conditions: A sudden market shock can cause institutions to liquidate, regardless of their initial thesis.
• Specific Scenarios: The accumulation is for a defensive, not offensive, reason (e.g., hedging a larger portfolio).

Psychological Rules

• Mental Discipline: This strategy requires patience and the ability to sit through periods of low volatility.

Advanced Components

• Market Regime Detection: Not critical, but helpful.
• Filters: Use a scanner that can track dark pool volume as a percentage of total volume.
• Correlation: Be aware if the accumulation is happening across an entire sector.
• MTF Alignment: A stable weekly chart adds confidence.

Location

• Where Strongest: In established, liquid stocks that are temporarily out of favor or consolidating.
• Where Weakest: In low-float, high-volatility stocks driven by retail sentiment.