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Three Timeless Strategies from the Evergreen Playbook

Three Timeless Strategies from the Evergreen Playbook

•Playbook•SEC•trading strategies•risk management
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Three Timeless Strategies from the Evergreen Playbook

1. STRATEGY CONTEXT

In the ever-evolving landscape of financial markets, traders often face the challenge of adapting to changing conditions while maintaining a disciplined approach. The Evergreen Playbook addresses this by providing strategies that remain relevant across different market environments. These strategies are particularly beneficial for swing traders and position traders who seek to capitalize on medium to long-term trends without falling prey to common behavioral pitfalls like FOMO, hesitation, or oversizing.

The importance of these strategies lies in their ability to navigate various market structures, manage risk effectively, and adapt to different volatility regimes. By integrating MarketVibe's tools, traders can make informed decisions based on objective data rather than emotional responses.

2. THE STRATEGY: STEP-BY-STEP

Strategy 1: Risk Management with CWI and ATR%

  1. Assess Market Risk: Check the Crash Warning Index (CWI). If CWI is above 6, it indicates elevated market stress. Reduce position sizes by 50% to manage risk.

  2. Adjust for Volatility: Use ATR% to determine stop-loss adjustments. If ATR% is above 1.2, widen your stop-loss by 10-20% to accommodate higher volatility.

  3. Set Risk Per Trade: Limit risk to 2% of your trading capital per trade when CWI is high. This ensures that no single trade can significantly impact your portfolio.

Strategy 2: Timing Entries with Market Dashboard and Sector Scores

  1. Market State Analysis: Refer to the Market Dashboard. If it shows a Bullish state, prioritize offensive strategies by increasing the frequency of new entries.

  2. Sector Leadership: Use Sector Scores to identify leading sectors. Enter trades in sectors with scores above 70, indicating strong momentum.

  3. Entry Confirmation: Confirm entries with the % Above 50-DMA. If the percentage is above 60%, it suggests healthy breadth and supports new positions.

Strategy 3: Breadth and Leadership Confirmation

  1. Breadth Analysis: Monitor the A/D Net trend. A rising trend confirms internal market strength and supports holding existing positions.

  2. NH–NL Expansion: Look for New High–New Low expansion. If NH–NL shows expansion, it confirms a robust market environment, supporting trend-following strategies.

  3. Execution with Daily Edge: Set up the Daily Edge execution panel. Define your Buy/Sell direction and set a Price Low and Price High for action ranges. Use notes like "watch 50DMA" to stay disciplined.

3. MARKETVIBE FEATURE INTEGRATION

  • Decision Edge Dashboard: Provides a clear daily read on risk, breadth, and momentum, helping traders align their strategies with current market conditions.
  • Market Dashboard: Guides behavior based on market state, ensuring traders adjust their strategies between offensive and defensive postures.
  • Crash Warning Index (CWI): Acts as a risk gauge, influencing position sizing and trade frequency.
  • ATR%: Helps adjust stop sizes and manage trade risk in volatile environments.

4. REAL-WORLD EXAMPLE

Imagine a scenario where the % Above 50-DMA is rising from 38% to 47%, indicating improving breadth. The CWI is at 5.4, and the Market Dashboard is in a Neutral state. The Tech Sector Score improves from 62 to 70. In this environment:

  • Risk Management: With CWI below 6, maintain standard position sizes but be cautious.
  • Entry Timing: The rising % Above 50-DMA and improving Tech Sector Score suggest a potential entry opportunity. Use the Daily Edge to define a Price Low of $150 and a Price High of $155 for a tech stock.
  • Execution: Enter the trade if the price enters your defined range, and use a stop-loss widened by 10% due to an ATR% above 1.15.

5. COMMON PITFALLS

  • Ignoring Market State: Failing to adjust strategies based on the Market Dashboard can lead to mistimed entries or exits.
  • Overreacting to Volatility: Not adjusting stop sizes with ATR% can result in premature exits.
  • Misreading Breadth Indicators: Misinterpreting % Above 50-DMA or A/D Net trends can lead to incorrect assumptions about market strength.

6. OPTIONAL FRAMEWORK SECTION

📋 PLAN

  • Entry Rules: Only enter trades when Sector Scores are above 70 and % Above 50-DMA is above 60%.
  • Risk Parameters: Limit risk to 2% per trade when CWI is high.
  • Watchlist Prep: Focus on sectors with improving scores.

⚡ EXECUTE

  • Trigger Conditions: Use Daily Edge to set action ranges and monitor execution.
  • Order Execution Logic: Enter trades when price enters defined ranges and confirm with breadth indicators.

📊 MONITOR

  • Track During Trade: Monitor A/D Net and NH–NL for confirmation.
  • Tighten Stops: Adjust stops if ATR% decreases, indicating lower volatility.
  • Exit Strategy: Exit if Market Dashboard flips to Warning or At-Risk.

7. PLAYBOOK CHECKLIST

□ Clear tactical objective — Achieve disciplined market engagement by adapting to market conditions.
□ Specific entry rules and thresholds — Enter trades when Sector Scores > 70 and % Above 50-DMA > 60%.
□ Risk rules with numbers — Limit risk to 2% per trade, adjust stops with ATR%.
□ 2–4 MarketVibe references — Use Market Dashboard, CWI, Sector Scores, ATR% for strategy validation.
□ Real example with numbers — Tech sector entry with Price Low of $150, Price High of $155.
□ Common pitfalls — Avoid ignoring market state and misreading indicators.
□ Execution checklist — Plan, execute, and monitor trades with defined rules and MarketVibe tools.

If you’d like a structured way to monitor these signals and run your daily plan, MarketVibe provides dashboards and execution tools at 1marketvibe.com.

Trading involves risk, and past performance is not indicative of future results. Always conduct your own analysis before making trading decisions.