Institutional Flow + Retail Sentiment Combo

Entry Logic

• Long entry: Institutional order flow (e.g., large block trades, dark pool prints) is bullish, while retail sentiment (e.g., social media, forums) is bearish. Go long, fading the retail sentiment.
• Short entry: Institutional order flow is bearish, while retail sentiment is euphoric. Go short, fading the retail sentiment.
• Confirmation: A technical entry signal, such as a breakout or a pullback entry.
• Timeframe: Daily chart for sentiment, 5-minute chart for entry.
• Location: Any.
• Market Condition: A divergence between institutional and retail activity.

Exit Logic

• Profit Target: 3R.
• Scaling Out: Scale out 50% at 2R.
• Trailing Stop: Trail a stop on the 5-minute chart.
• Signal Failure: If retail sentiment proves to be correct and the institutional flow reverses.
• Opposite Signal: Not applicable.
• Time Expiration: End of day.
• Momentum Loss: If the move stalls.

Stop Loss Structure

• Hard Stop: A 2% stop loss.
• Soft Stop: If the institutional/retail divergence disappears.
• Max Dollar Loss: $200 per trade.
• Max Percent Loss: 1% of account.
• Structural Stop: Below a recent swing low.

Risk Management Framework

• Risk Per Trade: 1% of account.
• Daily Limit: 2 losing trades.
• Weekly Limit: 5% drawdown.
• Max Drawdown: 10%.
• R:R Requirement: Minimum 2.5:1.

Position Sizing Model

• Sizing Approach: Fixed fractional.
• Volatility Adjustment: Not a primary concern.
• Conviction Sizing: Not recommended.
• Scaling In: Not recommended.
• Scaling Out: At 2R.

Trade Filtering

• Market Conditions: A clear divergence between smart money and dumb money.
• Setups: The divergence must be clear and confirmed by a technical entry.
• Instruments: Any stock with high retail interest.
• Time Restrictions: Any.
• Chop/News Avoidance: Not a concern.

Context Framework

• Trend Direction: The strategy is to side with the institutional flow.
• VWAP Relationship: Not a primary concern.
• MA Relationship: Not a primary concern.
• Range Location: Not applicable.
• Higher TF Alignment: Not required.

Trade Management Rules

• Breakeven: At 1.5R.
• Scale Out: At 2R.
• Add Size: Not recommended.
• Fast vs Slow Moves: Let the trade play out.

Time Rules

• Optimal Window: Any.
• Times to Avoid: Illiquid hours.
• Session Notes: A contrarian strategy against the retail crowd.

Setup Classification

• A+ Setup: A massive divergence between institutional buying and retail selling.
• A Setup: A clear divergence.
• B Setup: A weak divergence.
• C Setup: No divergence.

Market Selection Criteria

• Instruments: Stocks popular with retail traders.
• Volume: High.
• Volatility: High.

Statistical Edge Metrics

• Win Rate: 55%.
• Avg Win: 3R.
• Avg Loss: 1R.
• Profit Factor: 1.65.
• Expectancy: 0.65R per trade.

Failure Conditions

• Market Conditions: When the retail crowd is correct (e.g., a short squeeze).
• Specific Scenarios: The institutional flow was misleading (e.g., hedging).

Psychological Rules

• Mental Discipline: Requires the ability to go against the crowd.

Advanced Components

• Regime Detection: Not needed.
• Filters: Use services that track institutional and retail sentiment.
• Correlation: Not a concern.
• MTF Alignment: Not required.

Location

• Strongest: When retail sentiment is at an extreme.
• Weakest: When sentiment is neutral.