Volatility-Adjusted Breakout and Retest Strategy
Summary
The JIMENEZ strategy seeks trend continuation after a breakout and retest. It classifies candles by body and wick size, looks for a strong directional candle after an indecisive one, and checks whether a prior candle retested a nearby reference close within a stated 0.3% band. Volume, ATR, and trading-hour filters further gate entries. A cooldown and minimum price-spacing rule limit repeated entries, with the cooldown shortened during volatility spikes.
Risk controls use an ATR-based stop and profit targets that expand when candle strength and volatility are elevated; a trailing stop is optional. The document describes these mechanics but gives no performance evidence. It notes that fixed retest bands, volatile ATR readings, volume false confirmations, time filters, and many tunable parameters can undermine results. It recommends out-of-sample testing and cautions that rapid re-entry may reduce signal quality.
Key ideas
- The method combines candle structure with breakout and retest conditions to seek trend continuation.
- A retest is defined using a fixed band around a prior close, which may not suit every instrument or volatility regime.
- Volume, ATR, and time filters are used alongside cooldown and price-spacing rules to restrict entries.
- Stops and targets are based on ATR, with larger targets in strong, volatile conditions.
- The document reports no trading results and highlights false signals and overfitting risks.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.