Previous-Day High Breakout Entries with Stops and Trailing Exits

Summary

This document describes a long-only breakout strategy that places an entry above the previous trading day’s high. An adjustable gap changes how far the trigger sits from that level, and an optional rate-of-change filter can screen entries. The rules also track daily highs and lows, set stop-loss and take-profit levels, and optionally use a trailing stop or an EMA crossunder to close a position. The strategy may re-enter on repeated breakouts, subject to its order settings.

The text explains the intended controls and risks, including failed breakouts, whipsaws in ranging markets, and stops that are too sensitive. It lists a BTC/USDT futures backtest configuration, but does not present performance results, so effectiveness is not established. Suggested extensions include volatility or standard-deviation filters, dynamic stops, more robust EMA and trailing-stop settings, and testing across instruments. The number of adjustable settings makes parameter robustness an important concern.

Key ideas

• The main entry trigger is a break above the previous trading day’s high.
• A gap parameter can shift the trigger, and an optional rate-of-change filter can qualify entries.
• Fixed stop-loss and take-profit rules can be supplemented with a trailing stop or EMA-based exit.
• Failed breakouts and sideways markets can cause losses or repeated false entries.
• The document provides setup details but no reported results or evidence of profitability.

Tags

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