2015issue C1116-21
Scale-in and prior-range breakout management
The archive keeps the first breakout lot small enough to abandon, then admits size only when a named confirmation prints. Those confirmations include a fixed increment, a cup-continuation-add, a moving-average close, and a prior-day-trading-range-entry.
- Keep the first lot small enough to abandon, then admit size only when a named confirmation actually prints.
- A scale-in-position adds equal lots only after a stated confirmation while the original fill remains valid, and may pair those adds with a two-point-trail.
- A prior-day-trading-range-entry fires only after price exceeds the previous session high-low span by a stated increment.
- The planning rule accepts that half or more of the small starters may be stopped and centers management on later adds that remain valid.
Post-fill work as a second procedure
The archive describes a breakout-system as a single procedure that joins the first breakout fill, the stop, later adds, and the exit over the system holding period.
Editorial reading: treat the work after the first fill as a second, testable procedure. Keep the first lot small enough to abandon, then admit size only when a named confirmation actually prints. The named confirmations shown here are a fixed increment, a cup-continuation-add, a moving-average close, or a prior-day-trading-range-entry.
A small-ball-book of modest starters
The described breakout book uses a small-ball-book: seven to 15 concurrent positions of 100 to 300 shares, rather than one or two lots of 500 or more shares.
The planning rule centers management on a second, and occasionally third, add to starters that remain valid, rather than on one full-size first fill. It accepts that half or more of those small starters may be stopped.
Scale-in-position and the two-point-trail
A scale-in-position adds equal lots only after a stated confirmation while the original fill remains valid. One scale-in rule adds another equal lot after each two-dollar advance in an uptrend and pairs those adds with a two-point-trail.
A two-point-trail is a price-action stop kept two points below the working price and advanced as the trade extends. A worked sequence added five 100-share lots at 28, 30, 32, 34, and 36, then exited the full 500-share book when a trailing stop printed at 34.
The same two-point stop is shown as a 200-unit loss on 100 shares versus a 600-unit loss on 300 shares.
Cup-continuation-add and hammer-to-average-add
A cup-continuation-add may fire after a new cup at least one point deep and at least 0.50 above the cup high, without waiting a full two dollars from the first fill. The term names an add after a U-shaped pause that meets those depth and exceedance tests.
The cup example required an existing uptrend and at least a 10 percent high-low span on a 15-day window. The same add sequence is shown on 15-day and 90-day daily candlestick charts.
A pivot-and-breakout variant uses a hammer-to-average-add. It enters above a hammer high and adds only after closes above the 100-period and 50-period simple moving averages.
Prior-day-trading-range-entry
A prior-day-trading-range-entry is an entry or add that fires only after price exceeds the previous session high-low span by a stated increment. Read on a two-day chart, the archive rule enters or adds only after price exceeds the previous session span by one point.
In the stated illustration that span was 52.6 to 51.6, so the trigger was 53.60. Exceeding the prior day's range may start a new lot or add to an open lot, with above-average volume used as confirmation.
All readings on this track · 18 readings
- 1989Measured range, scale-in ladders, and spread replay as a cash-reserve design
- 1990When result pressure rewrites checklist and scale-in rules
- 1992Split-sample floors, ceilings, and standing aside
- 2006A swing operator's scale-in, structure, and cash-floor procedure
- 2011Scale in currency risk with tenth-size futures
- 2012Nested cycle scale-in with rewritten stops
- 2013Volume-confirmed swing breaks with scale-in and trailing stops
- 2014When volume thrusts still require a session procedure
- 2015Fusion entry and scale-in after broken levels
- 2015Volatility and volume gates for breakout entries
- 2015Scale-in and prior-range breakout management
- 2017A pair as a two-clock book
- 2017Pair-spread risk as a unit-by-unit capital sequence
- 2018Moving-average breakout with delayed scale-in
- 2018Steepening price-channel breakout with delayed confirmation and planned adds
- 2018A scale-in needs a gate or it is leverage
- 2020Two-stage longs: golden-cross starter, then cup-breakout add
- 2020Close-gated scale-in for swing breakouts