Use this simple flow to decide whether a trade based on AI predictions is worth taking, how to size it, and how to manage risk.
START HERE ⬇️
✅ 1. Is the AI Signal Direction Clear?
- ⬜ Yes → Go to Step 2
- ⬜ No / Flat → ❌ Skip the trade
✅ 2. What’s the Timeframe?
- ⬜ 5-Day → Go to Step 3A
- ⬜ 10-Day → Go to Step 3B
- ⬜ 20-Day → Go to Step 3C
🔄 3A. If 5-Day Signal:
What is the prediction strength?
- ⬜ Weak (<60%) → ❌ Skip it
- ⬜ Moderate (~70%) → ⚠️ Small trade only, tight stop, close fast
- ⬜ Strong (75%+) → ✅ Fast swing trade, moderate size, quick exits
🔄 3B. If 10-Day Signal:
What is the prediction strength?
- ⬜ Weak → ❌ Skip unless supported by technicals
- ⬜ Moderate → ⚠️ Swing trade with 2:1+ reward/risk
- ⬜ Strong → ✅ Full swing trade, can hold through mild pullbacks
🔄 3C. If 20-Day Signal:
What is the prediction strength?
- ⬜ Weak → ❌ Avoid unless confirmed by multiple indicators
- ⬜ Moderate → ⚠️ Start partial position, look to add on strength
- ⬜ Strong (80%+) → ✅ Go bigger: position trade or use long-dated calls
🧠 4. Is There Technical Confirmation?
- ⬜ Yes → Continue
- ⬜ No → ⚠️ Reduce size or wait for confirmation candle/volume
💣 5. Is There News Risk (earnings, Fed, etc)?
- ⬜ Yes → ⚠️ Trade small or delay entry
- ⬜ No → ✅ Proceed with trade plan
🧾 Final Checklist Before Entry:
- ⬜ Stop-loss set
- ⬜ Target defined (at least 2:1 vs. risk)
- ⬜ Trade size appropriate to strength & time horizon
- ⬜ Alerts/auto-sell set up (optional)
✅ If all checks pass → Take the trade with confidence and discipline.
❌ If 2+ warnings → Stand aside. Good trades come often — bad ones cost capital.