Skip to main content
Track Breakout system
17 / 23
Search the archiveLibrary
Library

2017issue C107

Four-day green candle breakout as one swing procedure

This archive case study specifies a swing-trading breakout-system in which a four-day-green-run must appear before an offset-buy-stop, a fixed-dollar-trail, and any later-run-add are allowed. TradersWeek editorial reading: continuation is taught as one testable entry-exit-abstention procedure, not as a chart impression.

  • The price-band-uptrend-scan limits the field to shares priced between 20 and 70 dollars that already show an uptrend on a daily candlestick chart covering about 90 sessions.
  • A four-day-green-run of at least four consecutive bullish daily candles is the momentum-strength filter that must be present before the offset-buy-stop is placed.
  • Every swing position uses a fixed-dollar-trail: a 2-dollar initial stop that is then trailed.
  • A later-run-add is permitted only after another four-day bullish-candle streak appears on an already open winner.
Entries in this reading3 entries
Current trackBreakout system74 readingsTrailing stop97 readingsCandlestick patterns130 readings

What the archive specifies

The archive describes one swing-trading breakout procedure. A breakout-system here is a rule set that turns a scanned market state into a buy-stop, a hold-or-exit decision, and an optional add, all as one procedure.

Candlestick-patterns supply the setup condition: daily open-high-low-close structure, especially a streak of consecutive bullish candles. A trailing-stop is a protective exit distance that is set before entry and then moved with an open swing position.

Entry, the protective trail, and any later add are specified together as one swing-trading breakout procedure.

How names are screened

The price-band-uptrend-scan is a visual screen of about 90 daily sessions. It keeps only names that are already rising and priced between 20 and 70 dollars a share.

The scan is limited to that price band and to an uptrend already visible on the daily candlestick chart. Names outside that screen are not part of the procedure.

The four-day green run as a gate

A setup is defined as a four-day-green-run: a streak of at least four consecutive bullish daily candles on that chart.

The four-day candle streak is used as a momentum-strength filter. It must be present before the breakout stop is placed. If the streak is absent, the offset-buy-stop is not armed.

Weight Watchers daily closes, April–July 2017

A trader should see three four-session green runs, each followed by new highs, as WTW climbs from the high teens to the high thirties. Daily closes were read from the published 90-day candlestick figure; the article printed no price table.
A trader should see three four-session green runs, each followed by new highs, as WTW climbs from the high teens to the high thirties. Daily closes were read from the published 90-day candlestick figure; the article printed no price table.Weight Watchers International Inc. (WTW) · 90-day daily · 2017-04-25T00:00:00.000Z to 2017-07-20T00:00:00.000Z

Closes are approximate to the nearest half-dollar because they were read from the candlestick raster against the printed dollar scale. The figure marks four-day green runs around mid-May, mid-June, and mid-July.

The offset buy-stop

Entry is specified as an offset-buy-stop: a resting buy placed 0.50 dollars above the highest high inside the qualifying candle streak.

The buy-stop is priced from the candles in that streak. The four-day-green-run is required before that order is armed.

The fixed-dollar trail

Every swing position in the procedure uses a fixed-dollar-trail. That is a 2-dollar initial stop that is then trailed.

The trailing-stop is set before entry and then moved with the open swing position. The same trail rule applies to each swing in the procedure.

When a later add is allowed

Additional size is allowed only as a later-run-add. That increase is permitted only after a later streak of four consecutive bullish daily candles appears on an already open winner.

No add is specified unless that later four-day-green-run appears on a position that is already open and ahead.

One entry, exit, and abstention procedure

The archive writes the scan, the four-day-green-run, the offset-buy-stop, the fixed-dollar-trail, and the later-run-add as a single breakout-system.

TradersWeek editorial reading: the same gate that arms the first offset-buy-stop also governs whether size may increase later. Names that fail the price-band-uptrend-scan or the four-day-green-run stay outside the procedure.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
17 of 23 in the Breakout system track
20187-7 pp.Next on Breakout systemConstructing inverse ETF breakouts above a 200-day averageInverse products that rise when the cash market falls use breakout entries that differ from ordinary funds because those products are more volatile.
All readings on this track · 23 readings
  1. 1995Range breakout rules with an expansion filter and moving-average exits
  2. 1995Write a weekly breakout as one parameterized entry and exit
  3. 1995Combining a trend rule, a breakout trigger, and a seasonal filter
  4. 1996Constructing a two-bar clearance breakout from a twenty-session exponential average
  5. 1996Two-bar exponential-average breakout as setup, stop, and flatten
  6. 1998A noise-offset breakout judged after walk-forward re-estimation
  7. 1998Gating a weekly average crossover with stored support and resistance
  8. 1998Moving-average candidates gated by support and resistance
  9. 2000Constructing next-close envelope targets for breakout stops
  10. 2001February soybean high breakout and June trailing stop
  11. 2005Box-and-breakout states written as ordered entry and exit rules
  12. 2007Match trend and breakout rules to the market condition
  13. 2010How a JM internal band becomes long and short entry and exit rules
  14. 2013Constructing a three-average trend-aligned breakout system
  15. 2016Volume-confirmed breakout entry rules
  16. 2017How to construct exponential standard deviation bands
  17. 2017Four-day green candle breakout as one swing procedure
  18. 2018Constructing inverse ETF breakouts above a 200-day average
  19. 2018Evaluating trend, breakout, and regression rules by average robustness
  20. 2019A crypto pair breakout after a sideways range
  21. 2019Next-session breakout rules after a high-volume close
  22. 2020Altcoin dual-stop breakout with a timed exit
  23. 2020Critiquing required stops in mechanical breakout systems
By fieldEntry and exit rules231 readingsBy year2017110 readings
All 74 readings tagged Breakout system
Also on Breakout system5 readings
2001February soybean high breakout and June trailing stop2016Constructing ATR-filtered breakout entries2017Test consolidation channel breakouts as one procedure2018Wide-range breakout, trailing stops, and pyramiding2019One procedure for breakout entry, trailing stops, and pyramid adds