Volatility-Contraction Pivot Breakouts in a Long-Term Uptrend

Summary

This long-only strategy looks for a volatility contraction while a broad moving-average trend filter is bullish, then places a stop entry above a recent high to seek a breakout. The trend filter requires price and moving averages to be ordered bullishly, with the longer average rising. Contraction is assessed using short-range high-low and close ranges, ranked against a lookback window; configurable percentile and close-range thresholds define pivot conditions. The author describes the setup as following Mark Minervini’s stage-two approach.

Once in a position, the script sets a percentage stop loss and multiple profit limits, with separate partial exits. The indicator also colors the chart background to distinguish different contraction conditions. These rules and parameters are provided in source code, but the document gives no backtest results or market-specific validation. The thresholds, lookback, and exit percentages are adjustable, and the strategy’s outcomes may therefore vary substantially with instrument, timeframe, and settings.

Key ideas

• The strategy filters for a bullish alignment and upward slope in longer-term moving averages.
• It identifies contraction using recent price ranges and percentile ranks over a configurable lookback.
• A qualifying contraction in an uptrend triggers a stop entry above a recent high.
• The position uses a percentage stop and staged profit limits for partial exits.
• The document offers implementation details but no measured performance or validation across markets.

Tags

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