Detrended Price Oscillator Momentum

Entry Logic

• Entry trigger: The Detrended Price Oscillator (DPO) crosses above the zero line for a long trade or below for a short trade.
• Confirmation: The price is trading above the 20-period EMA for a long trade or below for a short trade.
• Timeframe: 15-minute chart.
• Location context: The entry occurs after a pullback to the 20-period EMA.
• Market condition: The market is in a trending environment.

Exit Logic

• Profit targets: 2R and 3R.
• Scaling out: Sell 50% at 2R.
• Trailing stop: Use the 20-period EMA as a trailing stop.
• Signal failure exit: Exit if the DPO crosses back below the zero line (for longs) or above (for shorts).
• Opposite signal exit: Not applicable.
• Time expiration: Exit by the end of the day.
• Momentum loss: Exit if the DPO starts to move against the trade.

Stop Loss Structure

• Hard stop: Below the low of the entry candle (for a long) or above the high (for a short).
• Soft stop: A close below the 20-period EMA (for a long) or above (for a short).
• Max dollar loss: 0.5% of account equity.
• Max percent loss: 1% of the trade's value.
• Structural stop: Below the most recent swing low (for a long) or above (for a short).

Risk Management Framework

• Risk per trade: 0.25% of account equity.
• Daily limit: 4 losing trades.
• Weekly limit: 15 losing trades.
• Max drawdown: 3% of account equity.
• R:R requirement: 2:1.

Position Sizing Model

• Sizing approach: Fixed risk per trade.
• Volatility adjustment: Not applicable.
• Conviction sizing: Not applicable.
• Scaling in/out: Scale out at profit targets.

Trade Filtering

• Market conditions: Avoid range-bound markets.
• Setups: Only trade clear DPO signals.
• Instruments: Any liquid stock.
• Time restrictions: Not applicable.
• Chop/news avoidance: Not applicable.

Context Framework

• Trend direction: The 1-hour chart should be in a trend.
• VWAP relationship: Price should be on the correct side of VWAP.
• MA relationship: The 20-period MA should be above the 50-period MA (for longs) or below (for shorts).
• Range location: The entry should occur after a pullback from a new high or low.
• Higher TF alignment: The daily chart should be in a trend.

Trade Management Rules

• Breakeven: Move stop to breakeven after 1R.
• Scale out: At profit targets.
• Add size: Do not add size.
• Fast vs slow moves: Let fast moves run.

Time Rules

• Optimal window: Not applicable.
• Times to avoid: Not applicable.
• Session notes: Can be used in any session.

Setup Classification

• A+ criteria: A clear DPO signal with all context criteria met.
• A criteria: A clear DPO signal with most context criteria met.
• B criteria: A clear DPO signal with some context criteria met.
• C criteria: Avoid.

Market Selection Criteria

• Instruments: Any liquid stock.
• Volume: Not a primary consideration.
• Volatility: Not a primary consideration.

Statistical Edge Metrics

• Win rate: 60%
• Avg win: 2R
• Avg loss: 1R
• Profit factor: 1.2
• Expectancy: 0.2R per trade

Failure Conditions

• When strategy fails: Fails in choppy, non-trending markets.

Psychological Rules

• Mental discipline: Be patient and wait for the pullback.

Advanced Components

• Regime detection: Use a trend-following indicator to confirm the market regime.
• Filters: Not applicable.
• Correlation: Not applicable.
• MTF alignment: Check the 1-hour and daily charts.

Location

• Where strongest: In trending markets.
• Where weakest: In range-bound markets.