Entry Rules Review for Breaker Pattern Day Trading

Lets Review Our Entry Rules Cheat Sheet:

Breaker

-Be more than 5 ticks away from the big round number (75.00, 1.2000, 56.000)

-Must see a breakout first, above/below the RED LINE

-Swing Low for short trade, swing high for a long trade

-6-ticks from the swing-high/low to the next level of support/resistance

? Uses your trade management as a guide

? Scalper = 4/8/Runner

• 6 ticks = 4 + 2 slippage = 6ticks

? Day Trader (13-range)

• 8/16

• 10-tick rule (8 +2)

o Steep slope to the trigger line

? Avoid trading a breaker pattern when we see a flat trigger line

? You don’t need to worry about the slope on a 2-step pattern

• b/c it’s a trend reversal

• use the trigger line as support/resistance for a 2-step

o Momentum must be pointed down for a short, or up for a long

? Be careful around overbought, or oversold momentum

o Size of the orders (larger the better)

o Speed of the orders coming into the market

? Pace of tape indicator

? Faster the better to confirm your entry.

Exit Rules:

– Green or Yellow POT = use my mechanical trade management

Pink line on Trade Man Chart

– RED Pot I use a discretionary

o Red POT = slow speed

o MACD against my position

? Long = macd below the zero line

? Short = macd above the zero

o Momentum curls against my trade