Trade Management Strategy

Guiding Philosophy: We align with the primary trend, enter on confirmed momentum shifts at logical price levels, and manage risk with mathematical precision. We don't predict; we react to what the chart tells us.

Part 1: Momentum (The Regime Filter)

This is our strategic overlay. We must first know which way the wind is blowing. Your use of the 50/200 SMA "golden/death cross" is a classic trend filter. We'll adopt it for its clarity and widespread use, but on a **weekly timeframe** to focus only on the most powerful, long-term trends.

Primary Chart: Weekly Chart

Indicators:

50-Week Simple Moving Average (SMA)
200-Week Simple Moving Average (SMA)

Actionable Rules:

Bullish Regime: 50-Week SMA is **above** the 200-Week SMA. **We are only permitted to seek long entries on the daily chart.**
Bearish Regime: 50-Week SMA is **below** the 200-Week SMA. **We are only permitted to seek short entries on the daily chart.**
Ambiguous Regime: The SMAs are intertwined or flat. **We stand aside.** We are traders, not gamblers. We require a clear directional edge.

Enhancement: This weekly filter is superior to a daily one because it prevents us from getting shaken out by short-term noise. It forces us to trade in harmony with the institution-driven, multi-month trends.

Part 2: Anchors & Entry (The Tactical Setup)

Once the weekly chart gives us the green light (e.g., Bullish Regime), we drill down to the **daily chart** to find our specific entry point. Here, we'll combine my emphasis on price structure ("Anchors") with your use of the MACD for momentum confirmation.

Primary Chart: Daily Chart

Key "Anchors" (Areas of Interest):

Horizontal Support/Resistance (prior swing highs/lows)
The 20-Day EMA and 50-Day SMA (dynamic support/resistance)
High-Volume Nodes (from a Volume Profile)

Entry Trigger:

MACD (12, 26, 9)

Actionable Entry Tactic (for a Long Trade):

Identify an Anchor: Wait for the price to pull back and test a key support level (e.g., the 50-day SMA or a prior breakout point). We do not buy yet.
Wait for the MACD Cross: As the price holds at the support "Anchor," we watch the MACD. We enter the trade only after the **MACD line crosses above its signal line.**
Confirm with Volume: The entry day's volume should ideally be **higher than the 20-day average volume**, confirming conviction behind the move.

Why this is superior: This two-step process is more robust than using the MACD cross alone. By waiting for the cross to occur at a logical price anchor, we significantly reduce the number of false signals and ensure our entry is not in "no man's land" but at a point of structural significance.

Part 3: Pressure (Risk Management & Position Sizing)

This is where the trade is made or broken. Your risk management rules are excellent and form the core of this section. We'll refine them slightly for added precision.

1. Setting the Stop-Loss (The Invalidation Point):

Rule: The stop-loss is placed just below the "Anchor" that served as the basis for our trade. If we bought a bounce off the 50-day SMA, the stop goes slightly below it. If we bought a bounce off a horizontal support level, the stop goes slightly below that level.
Refinement with ATR: For added precision, place the stop **1.5x the Average True Range (ATR)** below the anchor point. This accounts for the stock's recent volatility and helps avoid being stopped out by random noise.

2. Position Sizing (The Professional's Rule):

Your formula is perfect and non-negotiable.
Position Size = (Account Value * % Risk per Trade) / (Entry Price - Stop-Loss Price)
% Risk per Trade: This should be fixed, between **0.5% and 1.5%** of total portfolio value. This is the single most important rule for long-term survival.

3. Exit Strategy (Harvesting Profits):

A single exit signal (like the reverse MACD cross) can be premature. A two-part exit strategy is superior for maximizing gains.
Initial Profit Target (PT1): Identify the next significant resistance "Anchor" above your entry. Sell **half** of the position at this level.
Manage the Remainder: After selling the first half, immediately move your stop-loss on the second half to your **breakeven point**. You now have a "risk-free" trade.
Final Exit: Hold the remaining half and trail your stop. A simple but effective method is to exit if the price closes below the **20-day EMA**. This allows you to ride the trend as long as possible while still protecting profits.

The Enhanced M.A.P. V2.0 Strategy in Action:

Momentum (Weekly): XYZ stock's 50-week SMA is above its 200-week SMA. Regime is Bullish. We are authorized to seek long positions.
Anchor (Daily): The stock pulls back to its 50-day SMA at $120. We observe it for a few days. The price stops falling and begins to consolidate.
Entry (Daily): The MACD line, which was below its signal line, now crosses above it. The volume on the day of the cross is 1.2M shares (vs. 800k avg.). This is our buy signal. We enter at the next day's open at $122.
Risk Management:
- Stop-Loss: The 50-day SMA is at $120. The current ATR is $2. Our stop is placed at $120 - (1.5 * $2) = $117.
- Position Size: Our account is $100,000. We risk 1% ($1,000). Our risk per share is $122 - $117 = $5. Our position size is $1,000 / $5 = 200 shares.
Exit Plan:
- PT1: The next major resistance is a prior high at $135. We place an order to sell 100 shares at $135.
- Breakeven: If the $135 target is hit, we move our stop on the remaining 100 shares from $117 to $122.
- Final Exit: We will hold the last 100 shares until the price gives a daily close below the 20-day EMA.

This hybrid V2.0 strategy is superior because it:

Uses a Multi-Timeframe Approach: It aligns tactical (daily) trades with the strategic (weekly) trend.
Combines Price & Momentum: It requires both a logical price level (Anchor) and a momentum shift (MACD) to align before entry, reducing false signals.
Employs a Sophisticated Exit Strategy: The two-part exit allows you to lock in gains while letting a portion of the trade run, maximizing the profit from strong trends.