Volatility Breakout
Volatility Breakout identifies periods of price compression and consolidation, then enters positions when price breaks out of the range with increased volume. Using Average True Range (ATR) to measure volatility contraction and expansion, this strategy aims to catch the early stages of explosive price moves.
Strategy Overview
Strategy Parameters
Volatility measurement window
Volatility contraction threshold
Price movement required for trigger
Volume confirmation requirement
Entry Signals
Advantages
- Catches major moves early
- Excellent risk-reward potential
- Clear invalidation levels
- Works in any market direction
Risks to Consider
- False breakouts can cause losses
- Requires patience for setups
- Lower win rate than other strategies
- Stop losses can be wider than average
Related Strategies
Important Risk Information
Past performance does not guarantee future results. All trading strategies involve risk, and you may lose some or all of your invested capital. The win rates and Sharpe ratios shown are based on backtesting from 2015-2024 and may not reflect future performance. Always use proper position sizing and risk management.