EMA Crossover with Volume Filter

Entry Logic

• Entry trigger: An EMA crossover (e.g., 9/20 EMA) occurs.
• Confirmation: The crossover is accompanied by a surge in volume, at least 150% of the average volume.
• Timeframe: 15-minute chart.
• Location context: The crossover happens after a period of consolidation.
• Market condition: A new trend is starting.

Exit Logic

• Profit target: 3R or the next significant support/resistance level.
• Scaling out: Not recommended.
• Trailing stop: Trail the stop on the other side of the slower EMA.
• Signal failure: Exit if the EMAs cross back.
• Opposite signal: Exit on a crossover in the opposite direction.
• Time expiration: None.
• Momentum loss: Exit if momentum fades.

Stop Loss Structure

• Hard stop: Below the low of the crossover candle (for longs) or above the high (for shorts).
• Soft stop: A close on the wrong side of the slower EMA.
• Max dollar loss: $150 per trade.
• Max percent loss: 1.5% of account.
• Structural stop: Below the recent consolidation range.

Risk Management Framework

• Risk per trade: 1% of account.
• Daily limit: 2 losing trades.
• Weekly limit: 5% drawdown.
• Max drawdown: 15%.
• R:R requirement: Minimum 2:1.

Position Sizing Model

• Sizing approach: Fixed fractional (1% of account).
• Volatility adjustment: Adjust size based on ATR.
• Conviction sizing: None.
• Scaling in: Not recommended.
• Scaling out: Not recommended.

Trade Filtering

• Market conditions: Avoid choppy, sideways markets.
• Setups: Only take crossovers with a clear volume surge.
• Instruments: Any liquid instrument.
• Time restrictions: None.
• Chop/news avoidance: Avoid trading around major news.

Context Framework

• Trend direction: A new trend is starting.
• VWAP relationship: The crossover should be in the direction of VWAP.
• MA relationship: The EMAs are crossing.
• Range location: The trade is taken on a breakout of a consolidation range.
• Higher TF alignment: The higher timeframe chart should confirm the new trend.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1.5R move.
• Scale out: Not recommended.
• Add size: Not recommended.
• Fast vs slow moves: Let the trade run in the new trend.

Time Rules

• Optimal window: Any time a new trend is starting.
• Times to avoid: Low-volume periods.
• Session notes: Works well in all sessions.

Setup Classification

• A+ setup: A crossover with a massive volume surge.
• A setup: A crossover with a decent volume surge.
• B setup: A crossover with a weak volume surge.
• C setup: Avoid.

Market Selection Criteria

• Instruments: Any liquid instrument.
• Volume: High on the crossover.
• Volatility: Moderate.

Statistical Edge Metrics

• Win rate: 55%.
• Avg win: 2.5R.
• Avg loss: 1R.
• Profit factor: 1.37.
• Expectancy: 0.37R.

Failure Conditions

• The strategy fails when the crossover is false, even with high volume.
• Avoid taking trades if the volume surge is not significant.

Psychological Rules

• Trust the volume as a confirmation signal.
• Do not get faked out by crossovers with low volume.

Advanced Components

• Regime detection: Use the ADX to confirm the new trend.
• Filters: Only take trades if the ADX is rising.
• Correlation: Be aware of market correlations.
• MTF alignment: Check the higher timeframe chart for confirmation.

Location

• Strongest: At the beginning of a new trend.
• Weakest: In a choppy, sideways market.