Momentum Breakout Entries with a Percent Trailing Stop

Summary

This strategy looks for sharp upward price moves and uses volume and a long-term moving average to filter entries. A long signal requires the close to rise by more than a configurable threshold from the previous close, remain within a specified maximum move, finish near the candle high, and have volume above the prior bar. The open and close must also be above the 200-day simple moving average. An optional average-volume filter is available.

After a signal, the strategy places a stop entry at the signal bar's high and tracks a stop below price using a configurable percentage. The stop ratchets upward as price rises, with the aim of limiting losses or protecting gains. The document provides sample parameters and a Bitcoin futures backtest window, but no performance results. It describes risks including failed breakouts, frequent exits from a tight stop, and missed or excessive signals from poor parameter choices; it does not establish profitability or demonstrate performance across markets.

Key ideas

• Entry conditions combine a sharp close-to-close gain, a close near the candle high, rising volume, and price above the 200-day average.
• The strategy limits qualifying price jumps with a configurable maximum breakout threshold.
• A stop entry is placed at the breakout bar's high.
• The trailing stop rises with price and exits when price reaches the stop level.
• The source provides a Bitcoin futures test window but reports no backtest results.

Tags

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