Breakout Momentum Strategy

This strategy focuses on capturing strong price moves when an asset breaks above a key resistance level on high volume. It’s ideal for intraday traders seeking quick gains during periods of volatility.

Setup:

Timeframe: 5-minute chart

Indicators: Volume, 20 EMA (Exponential Moving Average), VWAP (Volume Weighted Average Price)

Entry Criteria:

1. Identify a stock or crypto that’s consolidating just below a major resistance level.

2. Wait for a breakout above that level on volume at least 2× the average of the last 10 bars.

3. Confirm price is trading above VWAP and 20 EMA (shows bullish momentum).

4. Enter on the breakout candle close or slight pullback.

Stop Loss:

Just below the breakout level or below the VWAP (whichever is tighter).

Take Profit:

Risk/reward of at least 2:1

Scale out partial profits at 1:1, then trail the rest using a moving average.

Risk Management:

Never risk more than 1% of account per trade

Max 3 trades per day

This strategy works best in trending markets and should be avoided during low-volume or choppy sessions.