Playbook 01 · Slide 04 of 10 · Risk Management · Structure-Based Stops · Layered Harvesting

Stop Loss & Profit Taking

Stop placement based on market structure — not dollar amounts. Three-layer profit taking to lock gains while letting runners work.

Hard Max Stop

10 pts

No override ever

Layer 1 Exit

+5 pts

Exit 50%, move to BE

Layer 2 Exit

+10 pts

Exit 25%, trail to +3

Layer 3

Runner

Trail to key level

Stop Placement

VWAP Trade: 2–3 pts beyond VWAP on the opposite side

Support/Resistance: 1–2 pts beyond the level traded off

Opening Drive: 2 pts beyond the high/low of the first 5-min candle

Breakeven Rule: Move stop to breakeven once trade is up 5 pts

Trailing Stop: After +8 pts, trail 3–4 pts behind last swing

HARD MAX STOP: 10 pts per trade — no override

Partial Profit Taking

+5 pts

Layer 1 — Secure

Exit 50%. Move stop to breakeven. Trade is now risk-free.

+10 pts

Layer 2 — Extend

Exit 25%. Trail stop to +3 pts. 75% secured.

+20 pts

Layer 3 — Runner

Final 25%. Trail with stop. Target next key level.

Rule: A +5 pt winner must NEVER become a loser.

Position Sizing by Account

$5–10k

1–2 MES · $100–200/day

$10–25k

1 ES / 10 MES · $500–1,000/day

$25–50k

2 ES · $1,000–2,000/day

$50k+

3–5 ES · $2,500–5,000/day

Formula

Contracts = (Acct × 1%) ÷ (Stop pts × $/pt)