> For the complete documentation index, see [llms.txt](https://atm-day.gitbook.io/docs/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://atm-day.gitbook.io/docs/strategies-and-education/formulating-trading-strategy.md).

# Formulating trading strategy

ATM provides entry signals based on on-chain indicators. Your job is to turn them into a repeatable system: when to enter, when to exit, and how much to risk.

### 1. Define Your Trading Objectives

Start by deciding:

* What type of moves are you targeting?

  (Quick scalps, 2x flips, 10x runners, long holds)
* How often do you want to trade?

  (Multiple times a day, once per session, few high-quality entries per week)
* What’s your acceptable risk per trade?

  (% of capital you’re okay losing — common: 1–3%)

Clarity here makes everything else easier.

### 2. Choose Entry Conditions

Use ATM signals to filter opportunities.

Your entry criteria should include at least 2–3 of the following:

| Metric                     | Why It Matters               |
| -------------------------- | ---------------------------- |
| Wallets In > Wallets Out   | Smart money flow is positive |
| Buy/Sell Ratio > 1.5       | Buy pressure > sell pressure |
| Volume In Growing          | Indicates momentum           |
| Low Market Cap ($50K–300K) | More upside, more volatility |
| Fresh token (<30 min)      | Still early in lifecycle     |

Example rule:

> “Enter if token is <20m old, MC < $150K, net wallet inflow positive, buy volume is 10%+ more than sell volume.”

### 3. Define Exit Strategy

Pick one exit rule and stick to it for at least 10–15 trades.

| Exit Type     | Example Rule                                       |
| ------------- | -------------------------------------------------- |
| Fixed ROI     | Sell 100% at 2x or 3x                              |
| TRTP + SL     | Trailing TP at +100%, SL at -50%                   |
| Time-Based    | Exit if price flat after 60–90 mins                |
| Staggered     | Sell 50% at 2x, rest at 3–5x or with trailing stop |
| Momentum Exit | Exit if volume or wallet flow flips negative       |

Make sure it fits your risk tolerance and time availability.

{% hint style="info" %}
Tip: [ATM Algo Stats](https://atm.day/stats) might help you to define better your expectations from the token
{% endhint %}

### 4. Position Sizing

* Decide % of capital per trade (e.g., 2%)
* Avoid oversized positions based on “conviction”
* Plan for 10+ trades in a row without blowing up

Example:

If your account = $5,000 and risk per trade = 2% → Max loss = $100 → Adjust size accordingly based on SL.

### 5. Track & Evaluate

Use this template or your own sheet to track each trade:

1. Token + Algo
2. Entry + Exit price
3. ROI
4. Did you follow your system? (Yes/No)
5. What went right/wrong?

**Sample for your own sheet:**

| Timestamp | Token | Algo    | Entry price | Target (2x?) | Stop Loss (-50%?( | Max Drawdown | Peak ROI | Time to ATH | Note                            |
| --------- | ----- | ------- | ----------- | ------------ | ----------------- | ------------ | -------- | ----------- | ------------------------------- |
| 12:15 UTC | $TKN  | OG      | $0.0012     | $0.0024      | $0.0006           | -28%         | 3.4x     | 4h 12m      | Good entry, pumped 30 min later |
| 13:50 UTC | $LOL  | Pumpfun | $0.0009     | $0.0018      | $0.00045          | -12%         | 1.4x     | —           | Flat after 1h                   |

**After 20–30 trades, ask:**

1. What % are profitable?
2. Are losses controlled?
3. Am I improving execution?

If not — tweak only *one variable* at a time.

### 6. Strategy Examples (Starter Kits)

| Style           | Description                | Expected Win Rate | Sample Exit              |
| --------------- | -------------------------- | ----------------- | ------------------------ |
| Scalping        | In & out within 5–10 mins  | High              | +30–50% TP, -20% SL      |
| 2x Flips        | Most ATM signals work here | Medium            | TP at 2x, SL at -50%     |
| Trend Runners   | Ride to 5–10x+             | Low               | Partial exits + trailing |
| Narrative Plays | Based on memes/social hype | Variable          | Exit on momentum loss    |

### Final Checklist Before You Trade

* I know when I’ll enter
* I know how I’ll exit (TP + SL)
* I know how much I’m risking
* I’ve backtested or paper traded this setup
* I will log every trade I take

If you can’t check all five — don’t trade yet.

{% file src="/files/BBMso6gxGevXmOySPSk1" %}
worksheet for you to fill in
{% endfile %}