Three-Tool Confirmation System
Use AlgoEdge, OptionFlow, and DealerEdge together for high-conviction entries. Each tool confirms the next before you trade.
Overview
The 3-Tool Confirmation System reduces false signals by requiring alignment across all three Trade Echo tools. Follow the six steps in order for best results.
Step 1: AlgoEdge Signal
Look for alerts that meet these criteria:
- Size: >1,000 contracts
- Value: >$250K
- Direction: Single direction only (calls OR puts, not both)
- Strike: 5%+ OTM
Step 2: OptionFlow Confirmation
Verify with OptionFlow:
- Matching activity in same direction
- Clustered alerts (multiple within minutes)
- Total premium >$100K
Step 3: DealerEdge Direction
Use DealerEdge for directional bias:
| Price vs Anchor | Bias |
|---|---|
| Below anchor | Favor calls |
| Above anchor | Favor puts |
| GEX Rating 4-5 | Bullish |
| GEX Rating 1-2 | Bearish |
Step 4: Price Action Check
Before entering, confirm:
- Key level break (support/resistance)
- High volume on the move
- Trend matches your direction
Step 5: Strike Selection
- Delta: ~0.20 for balance of leverage and probability
- Premium: ~$2 per contract when possible
- Spreads: Use tight spreads to reduce slippage
Step 6: Risk Management
| Rule | Value |
|---|---|
| Max risk per trade | 1-2% of account |
| Stop loss | 20% on position |
| Exit time | Before 2 PM ET for 0DTE |
Summary
Only take trades when all three tools align. Skipping steps increases false signals and reduces edge.