Momentum Ignition Breakout

Entry Logic

Enter long on the 1-minute candle close above a significant resistance level. Confirmation: Price must accelerate rapidly, closing near its high, with high relative volume. The breakout candle must be at least 2x the average candle size. Timeframe: 1-minute for entry, 5-minute for context. Location: Breaking out of a tight range. Market condition: Initiating strong directional movement.

Exit Logic

Target 1: 1.5R. Scale out 50%. Target 2: 3R. Scale out remaining 50%. Trailing stop 1-minute 9 EMA. Exit if price closes below the 9 EMA after 1R profit. Exit if momentum stalls for 5 consecutive 1-minute candles.

Stop Loss Structure

Place hard stop 0.5R below the low of the breakout candle. Max dollar loss $200. Max 0.5% portfolio loss. Structural stop below the consolidation low.

Risk Management Framework

Risk 0.5% of capital per trade. Max daily loss 2%. Max weekly loss 5%. Maintain 2:1 R:R minimum.

Position Sizing Model

Size to risk 0.5% of capital. Reduce size by 25% for B setups. Increase size by 25% for A+ setups. No scaling in.

Trade Filtering

Only trade high-volume stocks ($5+). Avoid news events. Avoid chop zones (ATR < 0.5%). Trade during market open (9:30 AM - 11:00 AM EST).

Context Framework

Trade only in direction of daily trend. Price must be above 20 VWAP. Price must be above 50 SMA on 5-minute chart. Breakout should occur from a clear consolidation. Higher timeframe (15-minute) must show bullish structure.

Trade Management Rules

Move stop to breakeven after 1R profit. Scale out 50% at 1.5R. Re-evaluate if price consolidates at 2R. Manage fast moves aggressively; slow moves allow more room.

Time Rules

Optimal window: 9:30 AM - 10:30 AM EST. Avoid 12:00 PM - 1:00 PM EST. Session notes: Post-opening volatility offers best opportunities.

Setup Classification

A+: Strong daily trend, high volume breakout, rapid acceleration. A: Clear daily trend, good volume, strong acceleration. B: Moderate daily trend, average volume, less rapid acceleration.

Market Selection Criteria

Stocks with average daily volume > 5 million shares. Volatility (ATR) > 1.0%. Market cap > $1 billion.

Statistical Edge Metrics

Expected win rate 55-60%. Avg win 1.8R. Avg loss 0.7R. Profit factor > 1.5. Expectancy $200 per $100 risked.

Failure Conditions

Breakout fails to hold. Momentum quickly fades. Volume declines after breakout. Market reverses.

Psychological Rules

Adhere strictly to stop loss. Do not chase trades. Accept small losses. Avoid revenge trading.

Advanced Components

Use 5-minute chart for multi-timeframe alignment. Confirm breakout on 1-minute and 5-minute. Scan for sector strength.

Location

Strongest in early market session. Weakest during lunch hour.