Impulse, Compression, and Confirmation Breakout Strategy

Summary

The strategy looks for a directional impulse followed by a tight consolidation and a close beyond that consolidation’s range. It defines an impulse using bar range relative to ATR, measures compression against ATR, and requires a minimum number of small bars. A breakout must also have a minimum candle-body share of its range. The next candle must confirm in the same direction before an entry can occur.

Long trades require price above both the slow EMA and VWAP; shorts require price below both. Positions are divided into three portions with two profit targets and a trailing exit for the runner. A stop loss is optional and disabled by default in the supplied settings. The document provides the strategy logic and parameters, but no backtest results or evidence that it is profitable. Its author describes it as a test version, and the code’s behavior depends on chart data and strategy settings; the stated targets and stops do not establish an appropriate risk profile.

Key ideas

• A qualifying impulse starts the setup, followed by a measured period of price compression.
• The strategy triggers on a sufficiently strong close outside the compression range and waits for a confirming candle.
• EMA and VWAP filters determine whether long or short entries are permitted.
• Positions use two profit targets and a trailing exit for a remaining portion, with an optional stop loss.
• The document supplies no performance results, so the strategy’s effectiveness is unverified.

Tags

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