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This episode features trader Elliot Serge in the “Words of Rizdom” studio—an unfiltered sit-down where he unpacks six years in the game, from private investors to navigating the wild world of funded accounts. Elliot matters because he says the quiet parts out loud: how he built pain tolerance after five-figure drawdowns, why he sometimes breaks the “fixed 1% risk” rule, and how real traders adapt beyond Instagram gloss. It’s direct, human, and focused on what actually moves the P&L.
In this piece, you’ll learn how Elliot thinks about risk across personal vs. prop accounts, the mindset that survives losing streaks, and a pragmatic take on consistency (hint: it’s not “5K every month like clockwork”). We’ll cover why rules matter—but also when to bend them—plus the real costs and benefits of funded accounts, and the difference between chasing a holy-grail strategy and building one that fits you. If you’re new or rebuilding, this is a clean blueprint for stacking skill, managing emotion, and making money like a professional.
Elliot Serge Playbook & Strategy: How He Actually Trades
Operating Universe & Timeframes
Here’s the quick map of where Elliot plays and why it matters. Knowing the instruments, sessions, and timeframes stops you from chasing every shiny thing and helps you specialize where your edge actually lives.
- Focus instruments: major FX (GBPUSD, EURUSD), US index futures (ES, NQ), and liquid large-cap equities/options when volatility is elevated.
- Primary rhythms: London open through New-York lunch for FX; first 120 minutes for indices/equities.
- Working charts: 4H for directional bias, 1H for context, 15m/5m for timing; 1m only for surgical entries—never for bias.
- If the ADR (Average Daily Range) is below its 20-day median, reduce trade frequency by 50%—you’re in a “grind day.”
- Skip the first 3 minutes after a cash open on indices; spreads and stops are noisier, and fills are worse.
- Trade no more than two markets simultaneously; context switching kills execution quality.
Bias First, Setup Second
Elliot builds a top-down bias and then waits for the price to “agree” on the lower timeframe. This prevents random entries and forces alignment before the risk goes on.
- Define daily bias with 4H structure + 20/50 EMA slope + prior day’s high/low: trade with slope and toward liquidity sweeps.
- If DXY strengthens while ES is risk-off, favor USD-long FX plays; if divergence appears, cut size by half.
- No counter-trend trades unless a stop-run takes out a key level (PDH/PDL, weekly swing) and rejects on 5m with delta/volume divergence.
- VWAP rule: with-trend trades only above (for longs) or below (for shorts) session VWAP; counter-trend requires reclaim/loss plus a second test.
- ATR guardrail: target initial R multiple using 14-period ATR on the execution timeframe—TP1 at 0.75× ATR, trail for runners.
Entry Mechanics (The “Green-Light Checklist”)
Entries are simple and repeatable. The goal is to look for the same picture every time, so your stats actually mean something.
- Must have: (1) higher-timeframe bias, (2) key level, (3) trigger candle, (4) clean stop. Miss any one—pass.
- Triggers Elliot favors: 5m engulf after a liquidity sweep; 15m pullback to VWAP/AVWAP anchored to session open; 5m break-retest of pre-market range.
- Confirmation: volume expansion on the break + shallow pullback (≤50% of impulse). If pullback retraces >61.8%, stand down.
- Entry is at retest, not at the high/low of the impulse; FOMO entries require 0.5× size and wider stop (skip unless A+).
- If Spread/ATR > 10%, cancel the setup—transaction cost will eat R.
Risk Sizing & Trade Limits
Risk is dynamic, tied to volatility and account type. Elliot protects the downside first so he can stick around long enough to let stats play out.
- Personal account base risk: 0.5–0.8% per trade; drops to 0.25% when VIX < 14 or ADR compression is evident.
- Prop/funded accounts: never exceed 0.35% per position; respect daily loss limits—stop trading at −1.25R on the day.
- Daily loss circuit breaker: at −2R realized, platform lockout until the next session. No exceptions.
- Max open risk: 1.0R across all positions; if two correlated positions are on, split risk 0.5R/0.5R.
- Move stop to breakeven only after TP1 at 0.75R is hit and the structure makes a new swing in your favor, not earlier.
Exits, Targets & Trade Management
Elliot keeps the exits rule-based to avoid “hope mode.” Targets are pre-planned, then managed with structure and volatility.
- Default take-profit ladder: scale 50% at 0.75R, 25% at 1.25–1.5R, trail final 25% behind 5m swing lows/highs or a 3× ATR stop.
- If price closes back through VWAP against your position after TP1, exit remaining—context flipped.
- Time-stop: if a trade stalls for 45–60 minutes without printing a second structure break in your favor, close at market.
- News-adjacent: close runners before high-impact data unless already >1R; reopen only after first post-news pullback stabilizes.
Playbook Setups (A-Tier Only)
Elliot trades a short, named list of repeatable patterns. Naming them keeps the journal clean and makes the performance review objective.
- VWAP Reclaim Trend-Continuation: Bias long, dip below VWAP into previous session high, reclaim with 5m engulf; stop below sweep low, targets per ladder.
- Liquidity Sweep & Reversal: Takeout of PDH/PDL, failure to hold beyond, 5m engulf with volume expansion; entry on retest of swept level.
- Opening Range Break & Retest (Indices): 30-min OR established; first break with impulse + delta confirmation; buy/sell the retest to OR boundary.
News & Macro Filters
He doesn’t predict macro; he respects it. The goal is to avoid landmines and use volatility spikes when they align with bias.
- Red-flag events (CPI, NFP, FOMC, central bank decisions): flat 5 minutes before; trade only post-release structure with half size on first attempt.
- For FX, align with central-bank tone: if BoE hawkish vs Fed neutral, favor GBP strength unless price action disagrees—size down on disagreement.
- If a surprise print flips risk sentiment (e.g., indices dumping, dollar ripping), cancel all non-A setups for the session.
Prop vs. Personal Account Tactics
Constraints change behavior. Elliot adapts the same setups to different risk rules so he doesn’t breach limits or clip winners too early.
- Prop rules: smaller per-trade risk, faster partials (first scale at 0.5R), and a hard daily stop; no pyramids.
- Personal rules: can pyramid once per trade only after +1R and a fresh 5m HL/LH forms; second entry must use the original stop for net risk ≤ original R.
- If nearing trailing drawdown, switch to “survival mode”: take only A+ setups with 0.25R risk until equity recovers 2R.
Intraday Execution Habits
Most edge is in the habits: prep, timing, and when not to trade. Elliot turns this into a checklist to cut noise.
- Pre-market: mark weekly/daily swing zones, PDH/PDL, ONH/ONL, session VWAP/AVWAP anchors, and expected ADR.
- First trade window: minutes 15–90 of the session; second window: power hour only if the market is trending and breadth agrees.
- Skip trades during lunch lull unless trend day conditions (higher highs + shallow pullbacks + sustained VWAP separation) persist.
- One idea, one stop, one target plan written before entry—no improvising after you’re in.
Psychology & Behavior Rules
Discipline isn’t motivational quotes; it’s rules that trap your worst impulses. Elliot codifies the “don’ts” so they’re enforceable.
- No revenge trades: after a stopped A+ setup, mandatory 10-minute timeout before scanning.
- No adding to losers—ever. Scale only into strength after +1R with structure confirmation.
- If heart rate spikes or you feel rushed, reduce size to 0.25R for the next trade or call the session.
- Two consecutive B-setups taken = stop; you’re rationalizing.
Journal & Review (Weekly System Upgrades)
If you can’t measure it, you can’t improve it. Elliot journals like a pro and runs a weekly post-mortem to nudge the system forward.
- Log per trade: setup name, R planned, R realized, entry/exit screenshots, news context, VWAP relation, and emotional state (1–5).
- Track hit rate, expectancy, max adverse excursion (MAE), and time-in-trade; cull any setup with three consecutive weeks of negative expectancy.
- Tag session regime: trend day, range day, news-driven spike, grind; only trade setups in the regimes where they show a positive edge.
- Each Sunday, update the playbook with one tiny rule change maximum; never multiple variables at once.
Risk Scaling & Capital Growth
Elliot scales only when the data proves it. This keeps him from “feeling” bigger before the edge is ready.
- Increase unit R by 10–20% only after a 30-trade sample shows ≥1.2 expectancy and ≤1.2R max day drawdown.
- On drawdowns of −3R from equity peak, step size down by 25% until back at highs.
- Withdrawals: personal accounts skim 20–30% of monthly net profits; prop accounts leave profits until a cushion of 10R is built.
Clean Rules for Clean Charts
Less is more on the screen. Elliot uses just enough to see context and nothing else to confuse decisions.
- Chart pack: price, 20/50 EMA, session VWAP, anchored VWAP (session open and significant event), 14-ATR.
- No oscillators for entries; RSI only as a regime hint on higher timeframes (divergence = caution, not a signal).
- One color for with-trend, one for counter-trend drawings; delete all annotations at session end to avoid bias carryover.
Size Risk First: Position Your Trades by Volatility, Not Ego
Elliot Serge starts with risk, not entries, because capital protection buys you time to let the edge show up. He sizes positions by current volatility—ATR, ADR, or implieds—so a “small” chart doesn’t secretly carry “big” danger. If range compresses, his risk per trade compresses; if range expands, he takes the same dollar risk but fewer contracts. That way, a wild day and a sleepy day both translate into comparable downside in R.
He also ties size to context: personal accounts can flex slightly, funded accounts stay stricter to avoid trailing drawdown traps. Elliot Serge caps daily loss before the market does it for him and reduces size after any slip below that threshold. He scales into strength only after the trade proves itself, never into weakness. The result is a portfolio of consistent bet sizes that keeps psychology stable and P&L drawdowns shallow.
One Playbook, Many Markets: Diversify by Setup, Duration, and Underlying
Elliot Serge runs one repeatable playbook across FX, indices, and occasional equities rather than reinventing the wheel for every ticker. He diversifies by applying the same core patterns to different underlyings and splitting exposure by trade duration—some intraday, some swing—so no single market regime dominates outcomes. When GBPUSD ranges, the NQ trend day might carry the week; when indices chop, a clean FX breakout can pay the bills. The common language—structure, VWAP, and volatility—keep execution consistent while the mix of instruments spreads risk.
He also diversifies within the playbook by tagging setups A, B, or C and limiting how many of each can be active at once. Elliot Serge caps correlation by avoiding overlapping themes (e.g., two USD-long bets plus long ES risk) and staggers exit timings so winners don’t all depend on one session. If volatility compresses, he leans on slower swing holds; if it expands, he favors quick intraday rotations with defined targets. This way, breadth comes from thoughtful allocation—not from chasing every new strategy under the sun.
Mechanics Beat Predictions: Let VWAP and Structure Define Your Entries
Elliot Serge doesn’t try to outguess macro; he lets price mechanics do the heavy lifting. He builds a bias from a higher-timeframe structure and then waits for the session VWAP to confirm the path of least resistance. If he’s long-biased, he wants the price to reclaim VWAP and hold higher lows before risking a cent. Breakouts without a VWAP reclaim are “maybe later,” not “jump now.” This keeps him from paying top tick for a narrative that never materializes.
When momentum shows up, Elliot Serge enters on the retest, not the initial spike. He wants a clean stop below the swept low or above the failed high, and he rejects entries where the pullback retraces too deeply into the move. If the price closes back through VWAP against his position after entry, he manages out quickly instead of hoping. The rule is simple: structure first, VWAP second, trigger third—prediction doesn’t make the list.
Defined vs. Undefined Risk: When to Take Premium and When to Pay
Elliot Serge treats option structure like a risk dial: he sells premium when the market is range-bound and IV is rich, and he buys premium when momentum and catalysts can blow through levels. Defined-risk buys (debits, verticals) cap the downside and let him participate in asymmetric moves without gambling the account. Undefined-risk sells (credit spreads, covered positions) are reserved for stable regimes with clear levels and strict risk caps. He never sells naked risk into events or expanding ATR—if volatility is waking up, he’d rather pay than pray.
When he does sell, Elliot Serge keeps the duration short enough for theta to work but long enough to avoid getting steamrolled by intraday noise. He sets invalidation at structural breaks, not arbitrary P&L, and he scales out mechanically when time decay delivers the bulk of the edge. When he buys, he prefers directional structures with a built-in exit at the first sign of VWAP failure or a strong reversal candle. The takeaway is simple: pick the structure that matches the tape—pay for convexity when ranges are breaking, harvest decay when the market is sleeping.
Process Discipline: Daily Loss Limits, Time-Stops, and Data-Driven Scaling
Elliot Serge treats discipline as a checklist, not a mood. He hard-stops the session when daily loss hits a pre-set limit, because protecting emotional capital protects financial capital. Time-stops keep him from babysitting trades that aren’t moving; if a position drifts without a second structure break, he’s out. He logs every trade with setup name, risk, and context so the data can override memory.
When the numbers validate edge, Elliot Serge scales deliberately—small, incremental bumps to R after consistent expectancy, never a sudden leap. If a drawdown hits, he auto-dials risk down and narrows to only A-grade setups until equity recovers. He refuses to add to losers and only scales in strength after the first target is paid. The message is simple: rules define behavior, behavior defines outcomes, and outcomes compound only when discipline shows up every day.
In the end, Elliot Serge’s edge isn’t a single indicator or secret entry—it’s the way he stacks small, durable advantages and protects them with rules that never blink. He sizes by volatility so every trade risks a comparable slice of capital, he builds bias from higher-timeframe structure, and he lets VWAP and retests do the talking before he ever presses the button. The playbook travels well—FX, indices, the occasional equity—because the mechanics are universal: sweep, reclaim, retest, and a clean stop. When volatility sleeps, he harvests; when it wakes up, he pays for convexity and steps out of the path of steamrollers.
Just as important, Elliot Serge treats discipline like a system, not a personality trait. He separates prop from personal tactics to respect drawdown rules, caps his daily loss so he lives to fight the next session, and scales size only after the data proves expectancy. Time-stops keep him from babysitting hope trades, journaling keeps his memory honest, and a short list of named setups makes review brutally objective. The lesson is blunt and liberating: consistency comes from process, not predictions; profits come from managing risk, not chasing winners; and the trader who survives long enough to learn is the trader who ultimately gets paid.
