Cumulative Delta Trend Confirmation

Entry Logic

• Entry is a long position when cumulative delta is positive and rising, and price is in an uptrend.
• Confirmation is a pullback to the 20-period EMA.
• Timeframe is the 15-minute chart.
• Location is above VWAP.
• Market is in a clear uptrend.

Exit Logic

• Profit target is the previous swing high.
• Do not scale out.
• Trail the stop loss below the 20-period EMA.
• Exit if cumulative delta turns negative.
• Exit on a bearish engulfing candle.
• Exit if the price does not make a new high within 4 bars.
• Exit if momentum slows down significantly.

Stop Loss Structure

• Hard stop is placed below the pullback low.
• Soft stop is a close below the 20-period EMA.
• Maximum dollar loss is $150 per trade.
• Maximum percent loss is 1.5% of the account.
• Structural stop is below the most recent swing low.

Risk Management Framework

• Risk 1% of the account per trade.
• Daily loss limit is 3% of the account.
• Weekly loss limit is 6% of the account.
• Maximum drawdown is 20%.
• Risk-reward ratio must be at least 1:1.5.

Position Sizing Model

• Use a fixed risk position sizing model.
• No volatility adjustment.
• Full size for all setups.
• Do not scale in or out.

Trade Filtering

• Avoid trading in ranging markets.
• Only trade pullbacks to the 20-period EMA.
• Trade only major currency pairs.
• Trade only during the London and New York sessions.
• Avoid trading before major economic data releases.

Context Framework

• Trend is up.
• Price is above VWAP.
• Price is above the 20 and 50 EMAs.
• Location is a pullback to the 20 EMA.
• The higher timeframe chart (daily) shows a clear uptrend.

Trade Management Rules

• Move stop to breakeven when the price reaches a 1:1 risk-reward ratio.
• Do not scale out.
• Do not add to the position.
• Hold the trade as long as the trend remains intact.

Time Rules

• Optimal trading window is from 8:00 AM to 12:00 PM EST.
• Avoid trading during the Asian session.
• The strategy performs well during trending market conditions.

Setup Classification

• A+ setup: Pullback to the 20 EMA in a strong uptrend with positive cumulative delta.
• A setup: Pullback to the 20 EMA in a moderate uptrend.
• B setup: Pullback to the 20 EMA in a weak uptrend.
• C setup: No clear trend.

Market Selection Criteria

• Trade EUR/USD, GBP/USD, and USD/JPY.
• High liquidity is required.
• Volatility should be moderate.

Statistical Edge Metrics

• Expected win rate is 55%.
• Average win is 2.5R.
• Average loss is 1R.
• Profit factor is 1.375.
• Expectancy per trade is 0.375R.

Failure Conditions

• The strategy fails when the market transitions from a trending to a ranging state.
• Avoid trading when there is a divergence between price and cumulative delta.

Psychological Rules

• Be patient and wait for the pullback.
• Do not exit the trade prematurely.

Advanced Components

• Use a trend-following indicator like the ADX to confirm the trend.
• Use a volatility filter to avoid trading in low-volatility conditions.
• Do not trade correlated pairs in the same direction.
• The daily chart must confirm the trend direction.

Location

• Strongest in the early stages of a new trend.
• Weakest in a mature trend.
• The location within the trend impacts the risk-reward ratio.