0DTE Momentum Put Ride

Entry Logic

• Entry Trigger: Buy a put option when the underlying breaks down from a consolidation pattern.
• Confirmation: High volume on the breakdown candle.
• Timeframe: 5-minute chart.
• Location: Below a key support level.
• Market Condition: Strong downtrend.

Exit Logic

• Profit Target: 50% gain on the option premium.
• Scaling Out: Sell 50% at 50% gain.
• Trailing Stop: 20% trailing stop.
• Signal Failure: Exit if the breakdown fails and the underlying rallies back into the consolidation pattern.
• Opposite Signal: N/A.
• Time Expiration: Close position by 3:30 PM EST.
• Momentum Loss: Exit if volume dries up.

Stop Loss Structure

• Hard Stop: 25% loss on the option premium.
• Soft Stop: N/A.
• Max Dollar Loss: $125 per contract.
• Max Percent Loss: 25% of the option premium.
• Structural Stop: Above the high of the breakdown candle.

Risk Management Framework

• Risk Per Trade: 1% of account balance.
• Daily Limit: 2 losing trades.
• Weekly Limit: 4% drawdown.
• Max Drawdown: 10% of account balance.
• R:R Requirement: Minimum 2:1.

Position Sizing Model

• Sizing Approach: Fixed number of contracts.
• Volatility Adjustment: N/A.
• Conviction Sizing: A+ setups get 2x size.
• Scaling In: N/A.
• Scaling Out: At 50% gain.

Trade Filtering

• Market Conditions: Strong trending markets.
• Setups: Breakdown from a clear consolidation pattern.
• Instruments: High beta stocks.
• Time Restrictions: Any time.
• Chop/News Avoidance: Avoid trading before major news.

Context Framework

• Trend Direction: Aligned with the 15-minute and 60-minute trend.
• VWAP Relationship: Below VWAP.
• MA Relationship: Below the 9 and 21 EMAs.
• Range Location: Breaking down from the daily range.
• Higher TF Alignment: 15-minute and 60-minute charts show a clear downtrend.

Trade Management Rules

• Breakeven: Move stop to breakeven after 25% gain.
• Scale Out: At 50% gain.
• Add Size: N/A.
• Fast vs Slow Moves: Let winners run.

Time Rules

• Optimal Window: Any time.
• Times to Avoid: Low volume periods.
• Session Notes: N/A.

Setup Classification

• A+ Criteria: High volume breakdown, clear trend, all timeframes aligned.
• A Criteria: High volume breakdown, clear trend.
• B Criteria: Low volume breakdown.
• C Criteria: Avoid.

Market Selection Criteria

• Instruments: High beta stocks (TSLA, NVDA).
• Volume: High.
• Volatility: High.

Statistical Edge Metrics

• Win Rate: 45%.
• Avg Win: 60%.
• Avg Loss: 25%.
• Profit Factor: 1.08.
• Expectancy: Positive.

Failure Conditions

• Strategy Fails: In choppy, range-bound markets.
• Specific Scenarios: False breakdowns.

Psychological Rules

• Mental Discipline: Be patient and wait for the setup.

Advanced Components

• Regime Detection: Use a market regime filter to identify trending markets.
• Filters: Volume filter.
• Correlation: N/A.
• MTF Alignment: 15-minute and 60-minute charts must be aligned.

Location

• Strongest: In strong, trending markets.
• Weakest: In choppy, range-bound markets.