the_information_nexus/financial_docs/vwap_atr.md

# 2SD VWAP Trading System Checklist

## Setup Process

### 1. Initial Setup
- [ ] Open TradingView
- [ ] Create two charts side by side
- [ ] Left: ES1! 15-minute
- [ ] Right: BTC/USDT 15-minute
- [ ] Clear all existing indicators

### 2. Add Indicators
- [ ] Add VWAP (standard settings)
- [ ] Add 2SD bands (using code provided)
- [ ] Add ATR (14 period)
- [ ] Make VWAP blue, upper band red, lower band green
- [ ] Verify indicators are updating correctly

### 3. Alert Setup
- [ ] Create band touch alert (upper)
- [ ] Create band touch alert (lower)
- [ ] Set alerts to 'Once Per Bar'
- [ ] Include ATR value in alert message
- [ ] Test alerts are working

## Trade Process

### Pre-Trade Checklist
- [ ] Alert received
- [ ] Check which band was touched
- [ ] Note current ATR value
- [ ] Calculate position size (Risk/ATR)
- [ ] Verify pattern exists:
    - [ ] Price touched band
    - [ ] Clear rejection visible
    - [ ] Room to VWAP exists

### Trade Execution
- [ ] Enter after rejection confirms
- [ ] Place stop beyond rejection point
- [ ] Set target at VWAP
- [ ] Record entry details:
    - [ ] Entry price
    - [ ] Position size
    - [ ] Stop level
    - [ ] Target level
- [ ] Monitor for pattern break

## Quick Reference

### Long Setup 🟢
* → Touch lower band
* → Rejection upward
* → Target: VWAP
* → Stop: Below rejection

### Short Setup 🔴
* → Touch upper band
* → Rejection downward
* → Target: VWAP
* → Stop: Above rejection

## Position Sizing Formula
```
Position Size = Account Risk / Current ATR
Example:
- Risk: $100
- ATR: $2.50
- Position = $100/$2.50
```

## Pattern Requirements
1. Clean move to band
2. Clear rejection
3. Room to VWAP
4. No pattern = No trade

## Remember
* Pattern exists or doesn't - no maybes
* Use ATR for position sizing only
* Exit at VWAP or pattern break
* Keep it simple

---
Note: Check all boxes ([ ]) as you complete each step. Reset checklist for each new trading session.

---

Let me check our explicit verification against the original system design and identify any biases or misalignments.



ORIGINAL CORE SYSTEM:
```
1. Basic Elements:
- VWAP + 2SD bands
- ATR for position sizing
- ES 15m primary, BTC 15m secondary

2. Simple Signal:
- Price touches 2SD
- Rejection occurs
- No other conditions needed

3. Position Size:
Position = Account Risk / ATR

4. Management:
- Exit at VWAP or pattern break
```

IDENTIFIED MISALIGNMENTS/BIASES:

1. Over-Specification:
```
Removed:
- "At least 10 bars since last band touch"
- "Closes in upper/lower 50% of range"
- Specific wick requirements
```

2. Added Complexity:
```
Removed:
- Multiple validation layers
- Excessive disqualifiers
- Detailed space checks
```

Let me provide a bias-free, aligned version:



# 2SD VWAP Trading System Checklist

## Setup Process
- [ ] Open TradingView
- [ ] Create two charts:
    - ES1! 15-minute
    - BTC/USDT 15-minute
- [ ] Add indicators:
    - VWAP (standard)
    - 2SD bands
    - ATR (14)

## Pattern Verification

### LONG Setup
1. Band Touch:
- [ ] Price touches/crosses lower band
- [ ] Clean, single move to band

2. Rejection:
- [ ] Candle closes back above band
- [ ] Clear reversal visible

3. Target Space:
- [ ] VWAP visible above
- [ ] Clear path to VWAP

### SHORT Setup
1. Band Touch:
- [ ] Price touches/crosses upper band
- [ ] Clean, single move to band

2. Rejection:
- [ ] Candle closes back below band
- [ ] Clear reversal visible

3. Target Space:
- [ ] VWAP visible below
- [ ] Clear path to VWAP

## Trade Implementation

### Position Sizing
```
Position = Account Risk / Current ATR
Example:
- Risk: $100
- ATR: $2.50
- Position = 40 units
```

### Entry
- [ ] Enter after rejection confirms
- [ ] Stop beyond rejection point
- [ ] Target at VWAP

### Exit
- [ ] Hit VWAP = Exit
- [ ] Pattern breaks = Exit
- [ ] Stop hit = Exit

## Pattern Examples

### Valid Pattern
```
1. Clean touch of band
2. Clear rejection
3. Room to VWAP
```

### Invalid Pattern
```
1. Multiple touches
2. No clear rejection
3. Blocked path to VWAP
```

## Core Principles
1. Pattern exists or doesn't
2. No additional conditions needed
3. ATR sizes position
4. VWAP or break exits
5. Keep it simple

---
Note: This is a complete checklist. If pattern exists, trade. If not, wait.