My CPT Framework
Cue | Plan | Trigger
“CPT” will probably ring a bell to anyone who is familiar with Mike Bellafiore’s work. While I am aware of the opportunistic nature of the acronym, it’s not what you think.
Truth is, I’ve had periods where I’ve struggled a lot to sit on my hands, often getting involved in every small move. I saw trades everywhere -and took them-, draining both mental and account capital.
I created the following framework to help myself frame my setups on the fly and eventually fix my impulsiveness.
1. Cue
Price needs to do something that stands out to you, something that grabs your attention. Can be anything, some examples:
A liquidity grab
A reaction at a level
An aggressive move
A shift in market structure
Relative strength or weakness
A pattern of your liking
etc.
2. Plan
Elaborate the trade plan according to your thesis. Very simple but often overlooked. You don’t necessarily have to write this down, but it’s good to run it through in your head, as this is the step which will cut out all of the impulsive trades.
The plan must include the following fundamental elements:
1. What is your trade thesis and why it makes sense
2. Confluences that support your desired entry
3. Where does this idea get invalidated
4. How much are you risking
3. Trigger
When exactly are you hitting the button? What is your trigger? If you were an algo, what does price have to do for you to jump in?
Examples of this framework will be a recurrent theme throughout The Daily Writeup.
If you find yourself taking impulsive trades, feel free to give this a go and let me know how it went.