3. Pivot Point Breakout

Entry Logic

Price closes above/below a key daily pivot point (R1, S1, Central Pivot). Confirmation is a subsequent candle closing above/below the pivot. Timeframe is 5-minute. Entry is at the confirmation candle's close. Market condition is trending or volatile.

Exit Logic

Target is the next pivot point. Scale out 50% at 1R. Trailing stop 0.6 ATR from prior candle high/low. Signal failure: price re-crosses pivot. Time expiration: no target reached within 60 minutes. Momentum loss: 2 candles fail to extend.

Stop Loss Structure

Hard stop 5-10 ticks beyond the broken pivot. Max dollar loss $150 per trade. Max percent loss 1% of account. Structural stop at the 20-period EMA.

Risk Management Framework

Risk 0.75% of account per trade. Daily loss limit 2.5%. Weekly loss limit 7%. R:R requirement 1.2:1 minimum.

Position Sizing Model

Size based on stop loss distance. Volatility adjustment: smaller size for wider pivot ranges. Conviction sizing: 1% risk for A+ setups. Scale in: no. Scale out: yes, at 1R.

Trade Filtering

Market conditions: moderate to high volatility. Setups: clear break of R1/S1 or Central Pivot. Instruments: ES, NQ, CL. Time restrictions: avoid lunch hour. Chop avoidance: avoid low volume periods. News avoidance: avoid 10 minutes before/after news.

Context Framework

Trend direction: breakout aligns with daily trend. VWAP relationship: breakout above/below VWAP. MA relationship: price breaks 9-period EMA. Range location: breakout from consolidation near pivot. Higher TF: 30-minute chart shows strength.

Trade Management Rules

Move to breakeven after 0.6R profit. Scale out 50% at 1R. Do not add size. Fast moves: tighten stop to 0.25 ATR. Slow moves: allow 0.5 ATR.

Time Rules

Optimal window: 9:30 AM - 10:30 AM EST, 1:00 PM - 2:00 PM EST. Times to avoid: 11:30 AM - 12:30 PM EST. Session notes: Early New York, early afternoon.

Setup Classification

A+: Strong volume breakout, clear rejection of prior pivot, aligned with daily trend. A: Good volume, clean break, generally aligned with daily trend. B: Average volume, some hesitation at pivot, unclear trend. C: Low volume, choppy break, no trend.

Market Selection Criteria

Instruments: ES, NQ, RTY, YM. Volume: high daily volume. Volatility: ATR(14) > 0.3% of price.

Statistical Edge Metrics

Win rate: 50-55%. Avg win: 1.3R. Avg loss: 1R. Profit factor: 1.15-1.3. Expectancy: 0.1-0.2R.

Failure Conditions

False break and immediate re-entry. Price stalls at pivot. Low volume break.

Psychological Rules

Respect the pivot levels. Do not anticipate breaks. Be patient for confirmation.

Advanced Components

Regime detection: use ATR to confirm volatility. Filters: VIX correlation. Correlation: monitor related futures contracts. MTF alignment: 15-minute candle closes beyond pivot.

Location

Strongest: At the open of the session. Weakest: Mid-day consolidation.