Structure Break with Volume

Entry Logic

• Entry trigger: Price breaks a key market structure level (e.g., a swing high) with a significant increase in volume.
• Confirmation: Volume on the breakout candle is at least 150% of the 20-period average volume.
• Timeframe: 15-minute chart.
• Location context: At a key support or resistance level.
• Market condition: Any.

Exit Logic

• Profit target: A measured move of the previous range.
• Scaling out: 50% at 2R.
• Trailing stop: Trail below the 15-minute 20 EMA.
• Signal failure exit: Exit if price re-enters the broken structure.
• Opposite signal exit: Not applicable.
• Time expiration: Exit if the trade is not profitable within 2 hours.
• Momentum loss: Exit if momentum fades after the breakout.

Stop Loss Structure

• Hard stop: Below the low of the breakout candle.
• Soft stop: Not used.
• Max dollar loss: $150 per trade.
• Max percent loss: 0.75% of account.
• Structural stop: The breakout level.

Risk Management Framework

• Risk per trade: 0.5% of account.
• Daily limit: 2 losing trades.
• Weekly limit: 4% drawdown.
• Max drawdown: 12%.
• R:R requirement: Minimum 2:1.

Position Sizing Model

• Sizing approach: Fixed fractional sizing.
• Volatility adjustment: Standard sizing.
• Conviction sizing: Full size for A+ setups.
• Scaling in: Not recommended.
• Scaling out: At 2R.

Trade Filtering

• Market conditions to avoid: Low-volume markets.
• Setups required: A clear structure break with a volume spike.
• Instruments: Any liquid instrument.
• Time restrictions: High-volume sessions.
• Chop/news avoidance: Avoid around news.

Context Framework

• Trend direction: The breakout defines the new trend direction.
• VWAP relationship: The breakout should be away from the VWAP.
• MA relationship: The MAs should be starting to align with the breakout.
• Range location: Breaking out of a range.
• Higher TF alignment: The higher timeframe should support a new trend.

Trade Management Rules

• Breakeven: Move to breakeven at 1.5R.
• Scale out: At 2R.
• Add size: Not applicable.
• Fast vs slow moves: Expect a fast move after the breakout.

Time Rules

• Optimal window: Any high-volume session.
• Times to avoid: Low-volume periods.
• Session notes: Volume is the key to this strategy.

Setup Classification

• A+ criteria: A massive volume spike on the breakout of a major level.
• A criteria: A clear volume spike on the breakout.
• B criteria: The volume is only slightly above average.
• C criteria: The breakout is on low volume.

Market Selection Criteria

• Instruments: Any liquid instrument.
• Volume: The key to the strategy.
• Volatility: Expanding.

Statistical Edge Metrics

• Win rate: 55%.
• Avg win: 3R.
• Avg loss: 1R.
• Profit factor: 1.65.
• Expectancy: 0.65R per trade.

Failure Conditions

• The breakout is a false breakout.
• The breakout lacks follow-through.

Psychological Rules

• Requires acting quickly on the breakout.
• Requires trust in volume as a leading indicator.

Advanced Components

• Regime detection: Use volume-based indicators to confirm the regime shift.
• Filters: Not necessary.
• Correlation: The breakout should be confirmed by the broader market.
• MTF alignment: The higher timeframe should support a new trend.

Location

• Strongest: After a period of low-volume consolidation.
• Weakest: In a market with no clear volume patterns.