3-Day Breakout System Theory

Introduction

The 3-Day Breakout Trading System identifies entry points based on the price range of the last 3 days. When the price touches the volatility boundaries from top to bottom, an entry is made. This system is suitable for both daily and weekly charts, providing traders with reliable entry and exit points.

How It Works

Setup

The price range of the last 3 days is defined. When the price touches the volatility boundaries from top to bottom, an entry is made.

Evaluation

Last trading day of the week. Entry Monday - 1st trading day of the week

Permanent Filters

• 50 % + X must tend in one direction
• Intermarket spread DJIA: Weekly basis
• 20-day average weekly basis
• Triple bar trend-following filter weekly basis
• Slope angle filter of 3-day high - 3-day low

Volatility Filter

0.5 % - 2.5 % daily basis

Entry

3-day high course ➔ Stop Buy Long Entry. 3-day low course ➔ Stop Loss Short Entry

Stops

• Initial stop for LONG position is the current 3-day low.
• Initial stop for SHORT position is the current 3-day high.
• Trailing stop is adjusted daily by the amount of the book profit.
• Time stop is 3 candles if no stop is triggered, then liquidation.

Position Size

1 % of the account volume: Point distance of the initial stop = number of shares

Loss Brake

After 2 consecutive losses, the system is blocked for the applied timeframe. The same block applies to the traded base value.

System Highlights

• Advanced AI algorithms designed to spot market trends.
• Real-time analysis to make quick and informed decisions.
• Customizable options for individual trading preferences.

Optimizing Your Strategies

Discover techniques to maximize your trading success with our detailed guide on using the 3-Day Breakout System effectively.

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Conclusion

The 3-Day Breakout Trading System is more than a set of rules; it is a comprehensive trading framework that integrates technical analysis, psychology, and rigorous risk management. It equips traders with the knowledge and tools necessary to navigate the complexities of the market, maximizing opportunities while controlling risk. By applying this system, traders of all experience levels can enhance their market presence, making informed and profitable trading decisions.