Micro E-mini Scalp Strategy

Entry Logic

• Exact Entry Trigger: Enter long on a one-tick breakout above a 1-minute candle's high. Enter short on a one-tick breakdown below a 1-minute candle's low.
• Confirmation: The move should be in the direction of the 5-minute trend.
• Timeframe: 1-minute chart for entry, 5-minute chart for trend direction.
• Location Context: Trade in the direction of the trend, not at key support or resistance levels.
• Market Condition: A trending market with good order flow.

Exit Logic

• Profit Targets: A fixed target of 4-6 ticks.
• Scaling Out: Not recommended.
• Trailing Stop: Not used.
• Signal Failure Exit: Exit if the trade does not move in your favor within 1 minute.
• Opposite Signal Exit: Not applicable.
• Time Expiration: Exit after 1 minute.
• Momentum Loss: Not applicable.

Stop Loss Structure

• Hard Stop: A fixed stop of 4 ticks from the entry price.
• Soft Stop: Not used.
• Max Dollar Loss: $20 per contract.
• Max Percent Loss: 0.2% of account capital.
• Structural Stop: Not applicable.

Risk Management Framework

• Risk Per Trade: 0.1% of account capital.
• Maximum Daily Loss Limit: 0.5% of account capital.
• Maximum Weekly Loss Limit: 2% of account capital.
• Maximum Drawdown: 5% from peak equity.
• R:R Requirement: 1:1 risk-reward ratio.

Position Sizing Model

• Sizing Approach: Fixed contract size.
• Volatility Adjustment: Not applicable.
• Conviction Sizing: Not applicable.
• Scaling In: Not recommended.
• Scaling Out: Not recommended.

Trade Filtering

• Market Conditions to Avoid: Choppy, low-volume markets.
• Specific Setups Required: A clear trend on the 5-minute chart.
• Instruments: MES (Micro E-mini S&P 500), MNQ (Micro E-mini Nasdaq 100).
• Time Restrictions: Trade during the most liquid hours of the US session.
• Chop/News Avoidance: Avoid trading during major news events.

Context Framework

• Trend Direction: Trade in the direction of the 5-minute trend.
• VWAP Relationship: For longs, the price should be above VWAP. For shorts, the price should be below VWAP.
• MA Relationship: The 9 EMA should be above the 20 EMA for longs, and below for shorts on the 5-minute chart.
• Range Location: Not applicable.
• Higher TF Alignment: Not applicable.

Trade Management Rules

• Breakeven: Not applicable.
• Scale Out: Not applicable.
• Add Size: Not recommended.
• Fast vs Slow Moves: This is a very fast strategy. Be prepared for immediate fills and exits.

Time Rules

• Optimal Trading Window: The first and last hour of the US session.
• Times to Avoid: The midday chop.
• Session Notes: This strategy requires a direct-access broker with low latency.

Setup Classification

• A+ Setup: A clear trend with good order flow and high volume.
• A Setup: A decent trend with moderate volume.
• B Setup: A weak trend or low volume.
• C Setup: Avoid. A choppy market.

Market Selection Criteria

• Instruments: MES, MNQ.
• Volume/Liquidity: Very high volume and liquidity are essential.
• Volatility: Moderate to high volatility is preferred.

Statistical Edge Metrics

• Win Rate: 55-60%.
• Avg Win: 1R.
• Avg Loss: 1R.
• Profit Factor: 1.2.
• Expectancy: 0.1R per trade.

Failure Conditions

• When Strategy Fails: In choppy, low-volume markets.
• Specific Scenarios to Avoid: Trading against the trend.

Psychological Rules

• Mental Discipline: This strategy requires extreme focus and discipline. You must be able to make decisions quickly and without hesitation.

Advanced Components

• Regime Detection: Not applicable.
• Filters: Use a volume filter to confirm the strength of the trend.
• Correlation: Not applicable.
• MTF Alignment: Not applicable.

Location

• Where Strongest: In a strong, trending market with high liquidity.
• Where Weakest: In a choppy, low-volume market.