Opening Bell Scalp (First 5 Minutes)

Entry Logic

• Exact entry trigger: A breakout of the opening 1-minute candle's high or low.
• Confirmation requirements: The breakout occurs on high volume.
• Timeframe required: 1-minute chart.
• Location context: N/A.
• Market condition requirement: High-volume, high-volatility market.

Exit Logic

• Profit target(s): 20-30 cents above the entry price.
• Scaling out rules: No scaling out.
• Trailing stop rules: No trailing stop.
• Exit on signal failure: If the price does not move in the intended direction within 1 minute, exit the trade.
• Exit on opposite signal: If a reversal candle appears, exit the trade.
• Exit on time expiration: Exit the trade after 3 minutes, regardless of the outcome.
• Exit on momentum loss: If the volume dries up, exit the trade.

Stop Loss Structure

• Hard stop location: 5 cents below the low of the entry candle (for long trades) or 5 cents above the high of the entry candle (for short trades).
• Soft stop rules: None.
• Maximum dollar loss per trade: $100.
• Maximum percent loss per trade: 1% of the account.
• Structural stop placement: Below the low of the entry candle.

Risk Management Framework

• Risk per trade: 0.5% of the account.
• Maximum daily loss limit: 2 consecutive losing trades.
• Maximum weekly loss limit: 3% of the account.
• Maximum drawdown allowed: 5% of the account.
• Risk-reward ratio requirement: 2:1.

Position Sizing Model

• Recommended sizing approach: Fixed share size.
• Volatility-based adjustment: N/A.
• Conviction-based sizing (A+/A/B setup): N/A.
• Scaling in rules: No scaling in.
• Scaling out rules: No scaling out.

Trade Filtering

• Market conditions to avoid: Low-volume, low-volatility markets.
• Specific setups required: A clear breakout of the opening range.
• Stock/instrument requirements: High-volume stocks with a history of strong opening drives.
• Time of day restrictions: Only trade within the first 5 minutes of the market open.
• Chop/news avoidance rules: Avoid trading stocks with major news releases.

Context Framework

• Trend direction assessment: N/A.
• VWAP relationship: N/A.
• Moving average relationship: N/A.
• Range location: N/A.
• Higher timeframe alignment: N/A.

Trade Management Rules

• When to move stop to breakeven: After the price has moved 15 cents in your favor.
• When to scale out: No scaling out.
• When to add size: No adding size.
• How to handle fast moves vs slow moves: In fast moves, take profits quickly. In slow moves, be patient and let the trade work.

Time Rules

• Optimal trading window: 9:30 AM - 9:35 AM EST.
• Times to avoid: After 9:35 AM EST.
• Session-specific notes: This strategy is only for the opening bell.

Setup Classification

• A+ setup criteria: All entry criteria are met.
• A setup criteria: N/A.
• B setup criteria: N/A.
• C setup criteria: The breakout is not on high volume.

Market Selection Criteria

• Instrument requirements: Stocks with a daily volume of over 10 million shares.
• Volume/liquidity requirements: The stock must have a tight bid-ask spread.
• Volatility requirements: The stock must have a daily range of at least $2.

Statistical Edge Metrics

• Expected win rate: 50%.
• Average win size: $0.30.
• Average loss size: $0.10.
• Profit factor: 1.5.
• Expectancy per trade: $0.05.

Failure Conditions

• Market conditions where strategy fails: Choppy or range-bound markets.
• Specific scenarios to avoid: Trading against the pre-market trend.

Psychological Rules

• Key mental discipline requirements: The ability to act quickly and decisively in a fast-moving market.

Advanced Components

• Market regime detection: N/A.
• Volatility/liquidity filters: N/A.
• Correlation filters: N/A.
• Multi-timeframe alignment: N/A.

Location

• Where this setup is strongest: In stocks with a strong pre-market trend.
• Where this setup is weakest: In stocks with no clear pre-market direction.
• Location changes outcome: N/A.