ATR Breakout Strategy with Staged Profit Taking and Trailing Risk

Summary

This swing strategy enters long when price is above a 50-period simple moving average and breaks above the prior 20-period high. It uses a 14-period ATR to scale risk: the initial stop is one ATR below entry, and the first profit target is two ATR above entry. At that target, the strategy closes a quarter of the position and raises the stop to the higher of breakeven or the recent four-candle low.

A second quarter is intended to be closed when price extends more than two ATR above the 10-period average; the remaining position exits when price falls below that average. The document also describes risk-based sizing, but the supplied code does not visibly apply its stated risk percentage to position size, and the second fixed target is not used by the exit logic.

The published configuration covers ETH/USDT futures on a two-hour interval for part of 2024, with no performance results included. The author flags false breakouts, parameter sensitivity, gap risk, and weak performance in ranging markets, and suggests testing filters and settings by market.

Key ideas

• Long entries require price above the 50-period SMA and a break above the previous 20-period high.
• A 14-period ATR sets an initial stop one ATR below entry and a first target two ATR above entry.
• The exit plan scales out in stages and uses the 10-period average for the final exit.
• The published ETH/USDT futures backtest setup includes no reported performance results.
• The source does not implement the stated risk-based sizing visibly, and its second fixed target is unused.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.