Zero Lag EMA Scalp

Entry Logic

• Entry trigger: Price crosses the Zero Lag EMA.
• Confirmation: A candle closes on the other side of the Zero Lag EMA.
• Timeframe: 1-minute chart.
• Location context: The Zero Lag EMA is very responsive to price changes.
• Market condition: A fast-moving market.

Exit Logic

• Profit target: 1R or when the Zero Lag EMA flattens.
• Scaling out: Not recommended.
• Trailing stop: A close on the wrong side of the Zero Lag EMA.
• Signal failure: Exit if the Zero Lag EMA changes direction.
• Opposite signal: Exit on a signal in the opposite direction.
• Time expiration: Exit if the trade is not profitable within 3 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 Zero Lag EMA.
• Max dollar loss: $40 per trade.
• Max percent loss: 0.4% of account.
• Structural stop: Not applicable.

Risk Management Framework

• Risk per trade: 0.2% of account.
• Daily limit: 6 losing trades.
• Weekly limit: 3% drawdown.
• Max drawdown: 9%.
• R:R requirement: Minimum 1:1.

Position Sizing Model

• Sizing approach: Fixed dollar risk ($40 per trade).
• Volatility adjustment: None.
• Conviction sizing: None.
• Scaling in: Not recommended.
• Scaling out: Not recommended.

Trade Filtering

• Market conditions: Only trade in fast-moving markets.
• Setups: Only take trades when the Zero Lag EMA changes direction.
• 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 short-term trend is changing.
• VWAP relationship: Trade in the direction of VWAP.
• MA relationship: The Zero Lag EMA is very responsive.
• Range location: The trade is taken on a momentum burst.
• Higher TF alignment: The 5-minute chart should confirm the momentum.

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 sharp change in Zero Lag EMA direction with a strong confirmation candle.
• A setup: A decent change in Zero Lag EMA direction.
• B setup: A weak change in Zero Lag EMA direction.
• 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: 62%.
• Avg win: 1.1R.
• Avg loss: 1R.
• Profit factor: 1.70.
• Expectancy: 0.70R.

Failure Conditions

• The strategy fails in slow, choppy markets.
• Avoid taking trades if the Zero Lag EMA is flat.

Psychological Rules

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

Advanced Components

• Regime detection: Use the slope of the Zero Lag EMA to determine the momentum.
• Filters: Only trade when the slope is steep.
• Correlation: Be aware of market correlations.
• MTF alignment: Check the 5-minute chart for confirmation.

Location

• Strongest: In a fast-moving market.
• Weakest: In a slow, choppy market.