Institutional Order Flow Entry

Entry Logic

• Entry trigger: Following a trend, price pulls back to a previously broken swing high (in an uptrend) or swing low (in a downtrend) which now acts as support/resistance. This level is an area of institutional order flow.
• Confirmation: A bullish/bearish engulfing candle on the 5-minute chart at the retest of the broken structure.
• Timeframe: 1-hour for trend and structure, 5-minute for entry.
• Location context: Retest of a confirmed support/resistance level that was previously a swing point.
• Market condition: Strong, established trend.

Exit Logic

• Profit target: The next major swing high/low in the direction of the trend.
• Scaling out: 50% at 2R.
• Trailing stop: Trail stop below the 5-minute 20 EMA.
• Signal failure exit: Exit if price closes back below/above the retested level.
• Opposite signal exit: Exit on a confirmed market structure shift against the trend.
• Time expiration: Exit if the trade is not profitable within 2 hours.
• Momentum loss: Exit if momentum fades after the entry.

Stop Loss Structure

• Hard stop: 1 ATR below/above the entry candle.
• Soft stop: A close back beyond the retested level.
• Max dollar loss: $120 per trade.
• Max percent loss: 0.6% of account.
• Structural stop: Below/above the retested swing point.

Risk Management Framework

• Risk per trade: 0.4% of account.
• Daily limit: 3 losing trades.
• Weekly limit: 4% drawdown.
• Max drawdown: 12%.
• R:R requirement: Minimum 2:1.

Position Sizing Model

• Sizing approach: Fixed fractional sizing.
• Volatility adjustment: Adjust size based on the 5-minute ATR.
• Conviction sizing: Full size for A+ setups.
• Scaling in: Not recommended.
• Scaling out: At 2R.

Trade Filtering

• Market conditions to avoid: Ranging markets.
• Setups required: A clear trend with a clean pullback to a broken swing point.
• Instruments: Any trending instrument.
• Time restrictions: During active trading hours.
• Chop/news avoidance: Avoid around news.

Context Framework

• Trend direction: With the dominant 1-hour trend.
• VWAP relationship: Price pulls back to the VWAP, which is aligned with the broken structure.
• MA relationship: The 50 SMA on the 1-hour chart is acting as dynamic support/resistance.
• Range location: This is a trend-following trade, not a range trade.
• Higher TF alignment: The 4-hour and daily charts confirm the trend.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1.5R move.
• Scale out: At 2R.
• Add size: Not applicable.
• Fast vs slow moves: Expect a steady continuation of the trend.

Time Rules

• Optimal window: Any high-volume session.
• Times to avoid: Low-volume periods.
• Session notes: This is a bread-and-butter trend continuation setup.

Setup Classification

• A+ criteria: A perfect retest of a major broken swing high/low with a strong confirmation candle.
• A criteria: A clean retest and confirmation.
• B criteria: The retest is messy, or the confirmation is weak.
• C criteria: No clear trend.

Market Selection Criteria

• Instruments: Any liquid, trending instrument.
• Volume: Good volume on the confirmation candle.
• Volatility: Moderate.

Statistical Edge Metrics

• Win rate: 60%.
• Avg win: 2.5R.
• Avg loss: 1R.
• Profit factor: 1.5.
• Expectancy: 0.5R per trade.

Failure Conditions

• The retest fails and the level does not hold, indicating a potential reversal.
• The trend is exhausted and fails to continue.

Psychological Rules

• Requires patience to wait for the pullback.
• Requires discipline to enter even though price is moving against the trend in the short term.

Advanced Components

• Regime detection: Use ADX to confirm a trending market.
• Filters: Use volume profile to see if the retested level is a high-volume node.
• Correlation: Trade in the direction of the broader market.
• MTF alignment: Essential for this strategy.

Location

• Strongest: In a strong, established trend.
• Weakest: In a choppy, ranging market.