Trend Filter Rules
Daily 200 EMA Non-negotiable
Price must be trading above the 200 EMA on the Daily chart. If below — do not trade longs. Wait.
4H EMA Alignment
21 EMA must be above the 50 EMA on the 4H chart. Confirms medium-term bullish momentum.
1H Above 21 EMA
Price must be above the 21 EMA on 1H. Confirms short-term bullish structure before entry.
Setup Rules
Clear Impulse Move Required
3+ large bullish candles with high volume moving fast and clean. No impulse = no trade.
Pullback to 0.5–0.618 Zone
Draw fib on 1H from swing low to swing high. Wait for price to pull back into the golden zone.
Structure Confluence at Zone
An old resistance level turned support must exist near the fib zone. Levels stack = higher probability.
Volume Drops on Pullback
Volume must decrease as price retraces. High volume selloff = possible reversal, not a pullback.
Entry, Stop & Target Rules
Wait for 15M Confirmation Candle
Bullish engulfing, pin bar, or inside bar break on 15M. Enter on the OPEN of the next candle after confirmation closes.
Stop Below 0.786 or Swing Low
Add a 0.5–1% buffer below the level. Never tighten the stop to force R:R — reduce size instead.
Minimum 1:2 R:R at T1 Hard Rule
If the math doesn't give 1:2 to the previous high — skip the trade. No exceptions.
Two-Target Exit System
T1 = previous swing high (close 50%). Move stop to breakeven. T2 = 1.618 fib extension (close remaining 50%).
Risk Management Rules
Max 1% Risk Per Trade Hard Rule
Never risk more than 1% of total account on any single trade. Scale position size to match — not the stop.
Max 2 Trades Open at Once
As a beginner, limit concurrent exposure. Two setups maximum until you have 3 months of profitable data.
Daily Stop — 3% Drawdown Mandatory
If you lose 3% of account in one day, close everything and stop trading until the next day. No revenge trades.
No Trades After 8PM GMT
Low liquidity hours produce stop hunts and fakeouts. Best sessions: London open (8AM–12PM GMT) and NY open (1PM–5PM GMT).
No Trades on Major News Days
CPI, Fed rate decisions, major crypto regulatory news. Check the economic calendar every morning before analyzing charts.