Monday Reversal / Friday Continuation

Entry Logic

• Entry trigger: On Monday, a reversal of Friday's trend. On Friday, a continuation of the week's trend.
• Confirmation: A reversal or continuation pattern on the 60-minute chart.
• Timeframe: 60-minute chart.
• Location context: Trade against Friday's trend on Monday, or with the weekly trend on Friday.
• Market condition: A market that is either reversing the previous day's move or continuing its weekly trend.

Exit Logic

• Profit target: 2R or a key technical level.
• Scaling out: Scale out 50% at 1R.
• Trailing stop: Trail the remaining position with the 20 EMA on the 15-minute chart.
• Signal failure exit: Exit if the pattern fails.
• Opposite signal exit: Not applicable.
• Time expiration: Exit by the close.
• Momentum loss: Exit if the trend stalls.

Stop Loss Structure

• Hard stop: Beyond the high/low of the pattern.
• Soft stop: Not used.
• Max dollar loss: $200 per trade.
• Max percent loss: 1% of account.
• Structural stop: Beyond a key support/resistance level.

Risk Management Framework

• Risk per trade: 1% of account.
• Daily limit: 2 trades.
• Weekly limit: 2% drawdown.
• Max drawdown: 6%.
• R:R requirement: Minimum 2:1.

Position Sizing Model

• Sizing approach: Risk-based.
• Volatility adjustment: Not applicable.
• Conviction sizing: Not applicable.
• Scaling in/out: No scaling in.

Trade Filtering

• Market conditions: Only trade on Mondays and Fridays.
• Setups: Look for clear reversal or continuation patterns.
• Instruments: Major market ETFs and large-cap stocks.
• Time restrictions: Trade after the first hour of the session.
• Chop/news avoidance: Be aware of any weekend news that could affect Monday's open.

Context Framework

• Trend direction: Varies depending on the day and the setup.
• VWAP relationship: Use as a guide for intraday trend.
• Moving average relationship: Use to confirm the trend on the 60-minute chart.
• Range location: Trade from key support/resistance levels.
• Higher TF alignment: The daily chart provides the overall context.

Trade Management Rules

• Breakeven: Move stop to breakeven after 1R of profit.
• Scale out: At 1R and 2R.
• Add size: Not applicable.
• Fast vs slow moves: Be prepared for either.

Time Rules

• Optimal trading window: After 10:30 AM EST on Mondays and Fridays.
• Times to avoid: The opening hour.
• Session notes: This strategy is based on common weekly trading patterns.

Setup Classification

• A+ criteria: A textbook reversal or continuation pattern with high volume.
• A criteria: A clear pattern with good volume.
• B criteria: A weak pattern.
• C criteria: No clear pattern (avoid).

Market Selection Criteria

• Instruments: SPY, QQQ, IWM.
• Volume: High volume is a positive sign.
• Volatility: Moderate volatility is ideal.

Statistical Edge Metrics

• Win rate: 50%.
• Avg win: 2.5R.
• Avg loss: 1R.
• Profit factor: 1.25.
• Expectancy: 0.25R per trade.

Failure Conditions

• Fails if the expected pattern does not play out.
• Avoid on days with major news events that can override the typical weekly patterns.

Psychological Rules

• Requires flexibility to trade both reversals and continuations.
• Must be patient and wait for the setup to confirm.

Advanced Components

• Regime detection: Not applicable.
• Filters: Filter trades based on the strength of the weekly trend.
• Correlation: Be aware of the overall market sentiment.
• MTF alignment: The daily and weekly charts should be used for context.

Location

• Strongest: When there is a clear trend for the week.
• Weakest: In a choppy, range-bound week.