5 EMA Scalp Entry

Entry Logic

• Entry trigger: In a very strong trend, price pulls back to the 5 EMA.
• Confirmation: A small bullish or bearish candle forms at the 5 EMA.
• Timeframe: 1-minute or 2-minute chart.
• Location context: The trend is extremely strong and the 5 EMA is acting as tight support or resistance.
• Market condition: A very strong, fast-moving trend.

Exit Logic

• Profit target: 1R or the next minor support/resistance level.
• Scaling out: Not recommended.
• Trailing stop: A close on the wrong side of the 5 EMA.
• Signal failure: Exit immediately if the trade does not work.
• Opposite signal: Exit on a reversal signal.
• Time expiration: Exit if the trade is not profitable within 5-10 minutes.
• Momentum loss: Exit if momentum stalls.

Stop Loss Structure

• Hard stop: Just below the entry candle's low (for longs) or above the high (for shorts).
• Soft stop: A close on the wrong side of the 5 EMA.
• Max dollar loss: $50 per trade.
• Max percent loss: 0.5% of account.
• Structural stop: Not applicable.

Risk Management Framework

• Risk per trade: 0.25% of account.
• Daily limit: 5 losing trades.
• Weekly limit: 3% drawdown.
• Max drawdown: 10%.
• R:R requirement: Minimum 1:1.

Position Sizing Model

• Sizing approach: Fixed dollar risk ($50 per trade).
• Volatility adjustment: None.
• Conviction sizing: None.
• Scaling in: Not recommended.
• Scaling out: Not recommended.

Trade Filtering

• Market conditions: Only trade in extremely strong trends.
• Setups: Only take pullbacks to the 5 EMA.
• Instruments: Highly liquid stocks and ETFs.
• Time restrictions: Only trade during the first hour of the market open.
• Chop/news avoidance: Avoid trading around news.

Context Framework

• Trend direction: The trend must be extremely strong.
• VWAP relationship: Trade in the direction of VWAP.
• MA relationship: The 5 EMA is steeply sloped.
• Range location: The trade is taken in the direction of the trend.
• Higher TF alignment: The 5-minute and 15-minute charts should confirm the strong trend.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 0.5R move.
• Scale out: Not recommended.
• Add size: Not recommended.
• Fast vs slow moves: This strategy is only for fast moves.

Time Rules

• Optimal window: 9:30 AM - 10:30 AM EST.
• Times to avoid: Any other time.
• Session notes: Only works in the morning session.

Setup Classification

• A+ setup: A perfect pullback to the 5 EMA in a very strong trend.
• A setup: A decent pullback.
• B setup: A weak pullback.
• C setup: Avoid.

Market Selection Criteria

• Instruments: TSLA, NVDA, and other high-beta stocks.
• Volume: Very high.
• Volatility: Very high.

Statistical Edge Metrics

• Win rate: 65%.
• Avg win: 1R.
• Avg loss: 1R.
• Profit factor: 1.85.
• Expectancy: 0.85R.

Failure Conditions

• The strategy fails when the trend slows down or reverses.
• Avoid taking trades if the 5 EMA is not steeply sloped.

Psychological Rules

• Be quick to take profits and cut losses.
• Do not hesitate.

Advanced Components

• Regime detection: Use the slope of the 5 EMA to determine the trend strength.
• Filters: Only trade when the slope is greater than 45 degrees.
• Correlation: Be aware of market correlations.
• MTF alignment: Check the 5-minute and 15-minute charts.

Location

• Strongest: In a very strong, fast-moving trend.
• Weakest: In any other market condition.