Trend-Filtered Breakouts with Retests and Two-to-One Targets

Summary

This strategy looks for a close beyond the previous bar's ten-bar swing high or low, then stores that broken level. It waits for price to revisit the level and close back on the breakout side, alongside a directional candle confirmation. A pair of short-period exponential averages supplies the trend filter: longs require the faster average above the slower one, while shorts require the reverse. After entry, the stored level is cleared.

Stops are based on the recent three-bar low for longs or high for shorts, and targets are set at twice the entry-to-stop distance. The source provides a rules-based outline but no performance data, asset or timeframe guidance, transaction cost assumptions, or discussion of position sizing beyond a default equity fraction. The stop and target are recalculated from recent bars and the current close, so their behavior in a live position may differ from a fixed initial risk plan. Breakout retests and candle filters can still fail, especially in choppy markets.

Key ideas

• The system filters breakouts with the relative position of a fast and a slower exponential average.
• A trade requires a close beyond a recent swing level, a retest that holds, and a directional confirmation candle.
• The strategy sets stops from recent price extremes and targets at twice the calculated risk distance.
• It supports both long and short entries and resets the tracked breakout level after entry.
• The document supplies no backtest evidence or execution assumptions, and the exits may change as recent bars update.

Tags

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