Momentum Scalping Breakouts |
Breakout/Momentum |
Tick/1-min charts, MAs, Order Book |
Scalping |
Advanced |
Virtu: 99.9% win days (HFT), Retail: <3% profitable |
High speed, low edge for retail |
Scalp breakouts on tick/1-min charts using momentum surges. Tools include moving averages, order book, and tape reading. Enter on a breakout above resistance with high volume; exit after a small gain or on reversal signs. |
Enter on breakout above resistance with high volume and strong order book. |
Take profit after 0.5-1% move or rapid reversal sign. |
Tight stop 0.2-0.5% below entry or invalidation wick. |
Range Scalping |
Mean Reversion |
RSI, Stochastics, Bollinger Bands |
Scalping |
Advanced |
~75% win rate for RSI-2 (Connors), can have large losses |
High win rate, high whipsaw risk |
Fade price extremes within a range using mean reversion logic. Tools: RSI, Stochastics, Bollinger Bands. Enter when price hits upper/lower band and RSI is extreme; exit near mean or band midpoint. |
Enter at Bollinger Band extreme with RSI 70 and stochastics confirmation. |
Exit near midpoint or opposing Bollinger Band, or RSI neutral zone. |
Place stop beyond recent high/low or outside Bollinger Band. |
VWAP/Order-Book Scalping |
Micro Mean Reversion |
VWAP, Level II, Time & Sales |
Scalping |
Advanced |
Institutional: very high win rate; Retail: <5% succeed |
Low latency, high skill required |
Exploit price inefficiencies around VWAP and order book pressure. Tools: VWAP, Level II, time & sales. Enter when price deviates from VWAP with weak support; exit on reversion or small profit. |
Enter when price deviates significantly from VWAP with imbalance on order book. |
Exit at VWAP or after 1-2 tick profit. |
Stop when price breaks major VWAP support/resistance by >0.2%. |
Opening Range Breakout |
Breakout |
Opening High/Low, Volume Filter |
Intraday |
Intermediate |
ORB success declining; unreliable alone |
Add filters for better edge |
Trade breakouts of the opening 5-30 minute range. Use volume filter to confirm strength. Enter above opening high or below low; set tight stop inside range; exit at 1:1 or strong intraday resistance. |
Enter above opening range high (long) or below low (short) after volume confirmation. |
Target 1:1 or next resistance level, exit before end of session. |
Stop within opening range or on fast reversal candle. |
Intraday Trend Following |
Trend |
5/15-min MA, ADX, Time-of-day |
Intraday |
Intermediate |
~50% win rate, profit factor >1 |
Catch strong days, avoid chop |
Ride trending days using short-term trend indicators. Tools: 5- and 15-min MAs, ADX. Enter on pullback to moving average in trend direction; exit near intraday highs/lows or trailing stop. |
Enter on pullback to rising MA with trend confirmation via ADX or price structure. |
Exit at session highs/lows or use trailing stop. |
Stop below recent swing low or 1.5x ATR. |
Intraday Mean Reversion |
Reversal |
Candlesticks, RSI/Stoch, Volume Climax |
Intraday |
Advanced |
High variance; some setups >70% win |
Fade blowoffs carefully |
Look for intraday reversals after extended moves. Tools: candlestick patterns, volume spikes, RSI. Enter on reversal pattern at key intraday level; exit on reversion or fixed profit target. |
Enter after reversal candlestick at key support/resistance with volume climax. |
Take profit on mean reversion or key level re-test. |
Stop above/below reversal bar wick or next S/R zone. |
Breakout Patterns |
Trend Continuation |
Triangles, Flags, H&S, MACD |
Swing |
Intermediate |
Triangle breakouts: ~79% (Bulkowski) |
Volume confirmation boosts odds |
Swing trade classic chart pattern breakouts. Use daily triangles, flags, H&S with volume confirmation. Enter on close above pattern resistance; stop below structure; exit at measured move target. |
Enter on close above pattern resistance with confirming volume. |
Exit at measured move from pattern (equal to pattern height). |
Place stop below structure low or pattern invalidation point. |
RSI Oversold Bounce |
Mean Reversion |
RSI-2, Bollinger, Support |
Swing |
Beginner/Intermediate |
RSI-2 win rate ~73% (Connors) |
Good expectancy if strict exits used |
Buy short-term oversold conditions using RSI or Bollinger Bands. Enter when RSI < 10 and price at support; exit when RSI normalizes (50+) or price hits MA. |
Enter when RSI <10 and price near support or Bollinger Band low. |
Exit when RSI normalizes to 50-60 or hits short-term MA. |
Stop below support zone or Bollinger band break. |
Volume Price Action |
Volume Based |
OBV, VWAP, Support Zones |
Swing |
Advanced |
Volume spikes aid reversal timing |
Good filters for other strategies |
Use volume spikes, OBV, and VWAP to confirm entry. Look for breakouts or reversals with volume surges. Enter after volume-confirmed breakout; exit at key level or trailing stop. |
Enter after volume-confirmed breakout or on reversal candle with OBV support. |
Exit at key resistance level or use trailing stop near highs. |
Stop on volume climax reversal failure or VWAP break. |
Trend Following (TSM) |
Trend Following |
200-day MA, Donchian, MACD |
Position |
Intermediate |
TSM CAGR: ~20% (academic), Sharpe ~1.3 |
Works across asset classes |
Trend follow with moving averages or Donchian channels. Enter on 55-day high or 50/200 MA cross. Exit on 20-day low or moving average crossover in opposite direction. |
Enter on 50/200 MA cross or 55-day breakout; confirm with weekly trend. |
Exit on 20-day low or reverse MA cross. |
Stop on close below 20-day low or rising 50 MA. |
Relative Momentum |
Cross-sectional Momentum |
12M/6M Return Rank, MA Filter |
Position |
Intermediate |
Momentum avg return ~1%/mo (historical) |
High alpha, high reversals |
Rank assets by 6- or 12-month performance. Rotate into strongest monthly. Tools: performance rank, SMA filter. Hold top-ranked; rebalance monthly. Exit if rank drops below threshold. |
Enter top-ranked assets monthly; only if above MA or strength filter. |
Exit when rank falls or asset drops below MA support. |
Stop on rank drop out of top 30% or breakdown below trailing MA. |
Long-Term Mean Reversion |
Contrarian |
200w MA, Extreme Lows, Cycles |
Position |
Advanced |
3Y reversals: +25% (DeBondt/Thaler) |
Timing difficult, huge patience needed |
Buy extreme lows or sell extreme highs based on long-term charts. Tools: 200-week MA, deep lows. Enter on double bottom or bullish reversal near long-term low; exit after recovery to mean. |
Enter at long-term low with bullish reversal pattern or double bottom. |
Exit after 20-30% recovery or major resistance is reached. |
Stop if low breaks again or deeper weekly low forms. |
Crypto RSI Divergence |
Reversal |
Daily/Weekly RSI, Volume |
Swing/Position |
Intermediate |
~66% win, 2:1 RR (community BTC test) |
Momentum weakening, reversal stronger |
Trade RSI divergence on daily/weekly charts for BTC/crypto. Tools: RSI, volume. Enter on bullish divergence at support; exit on bounce or when RSI reverts to 60+. |
Enter on bullish RSI divergence at support with rising volume. |
Exit when RSI hits 60-70 zone or resistance is tested. |
Stop on breakdown of divergence level or bearish continuation. |
Fibonacci Retracement Bounce |
Mean Reversion |
Fibonacci Levels, RSI |
Swing |
Intermediate |
60-70% bounce rate at 50-61.8% levels |
Works well in trending markets |
Use Fibonacci retracement after a move to anticipate bounce levels. |
Enter at 50%-61.8% retracement with RSI support |
Exit at previous high/low or 0% level |
Stop below 78.6% retracement or recent swing low |
MACD Crossover |
Trend Reversal |
MACD, Signal Line, Histogram |
Swing/Position |
Beginner |
Win rate ~55-60% on daily charts |
Better with trend confirmation |
Trade crossovers of MACD and signal line for direction change. |
Enter when MACD crosses above signal line (bullish crossover) |
Exit when MACD flattens or crosses below |
Stop under swing low or MACD failure divergence |
Cup and Handle Breakout |
Breakout |
Cup & Handle Pattern, Volume |
Swing |
Intermediate |
Breakout success ~65-70% (Bulkowski) |
Volume confirmation increases success |
Classic bullish continuation pattern with a consolidation handle. |
Enter on breakout above handle resistance |
Target height of cup added to breakout point |
Stop below handle low or pattern midpoint |
Channel Breakout |
Breakout |
Parallel Trendlines, Volume |
Swing/Intraday |
Intermediate |
~60% win rate if confirmed by volume |
Use trailing stop on breakouts |
Trade breakout of well-defined ascending/descending channels. |
Enter on close above upper channel line with volume |
Exit at 2x channel height or resistance |
Stop inside the channel or recent low |
Bollinger Band Squeeze |
Volatility Breakout |
Bollinger Bands, Volume |
Swing/Intraday |
Intermediate |
Squeeze breakouts often lead to strong trends |
Low volatility signals explosive move |
Wait for bands to contract then break with volume. |
Enter on candle close outside band after tight squeeze |
Ride trend until opposite band tag or reversal candle |
Stop inside band or midpoint (MA) |
ADX Trend Entry |
Trend Following |
ADX, DI+, DI- |
Swing |
Advanced |
Best when ADX > 25 |
Used to confirm strong trends |
Trade in direction of DI+/DI- when ADX rising. |
Enter when DI+ crosses above DI- and ADX rising |
Exit when ADX turns down or opposite crossover |
Stop under swing low or trailing ATR |
Inside Bar Breakout |
Breakout |
Inside Bar, Price Action |
Intraday/Swing |
Intermediate |
~55-60% win rate with trend filter |
Good in consolidating markets |
Small candle inside prior range signals potential breakout. |
Enter on break above/below mother bar with volume |
Target 1.5-2x bar size |
Stop at opposite side of inside bar |
Engulfing Reversal |
Reversal |
Candlestick Patterns |
Intraday/Swing |
Beginner |
Win rate ~60% in backtests with confirmation |
Works best at key S/R levels |
Use bullish/bearish engulfing at turning points. |
Enter after bullish engulfing at support or bearish at resistance |
Target recent high/low or fixed R:R |
Stop below engulfing bar |
EMA Pullback Trend |
Trend |
9/20 EMA, Price Action |
Intraday/Swing |
Intermediate |
Good R:R, moderate win rate (~55%) |
Effective on trending stocks |
Buy pullbacks in uptrend using EMA zones. |
Enter on test of 9/20 EMA in trend direction |
Exit on momentum fade or opposite EMA cross |
Stop below EMAs or last swing low |
Gap and Go |
Momentum Breakout |
Gaps, Volume, VWAP |
Intraday |
Advanced |
Successful if gap >2% with volume; ~50-60% |
Needs morning volatility |
Trade morning gaps with strong continuation. |
Enter above premarket high with high volume |
Target 2-3x risk or intraday levels |
Stop under VWAP or gap fill level |
Hammer Reversal |
Reversal |
Candlestick, Volume |
Intraday/Swing |
Beginner |
~60% win rate near support zones |
Look for volume spike confirmation |
Use hammer candle after sharp drop to enter long. |
Enter after hammer close near support |
Exit at resistance or next high |
Stop under hammer wick |
Parabolic SAR Trend |
Trend Following |
PSAR, MA |
Swing |
Beginner |
~55% win rate with trend filter |
Works best with strong trends |
Follow dot reversal as trend signal. |
Enter on PSAR flip in trend direction |
Exit on opposite PSAR flip or MA cross |
Stop at PSAR level |
Triple Top/Bottom |
Reversal |
Chart Pattern, Volume |
Swing |
Advanced |
Success ~60-65% with confirmation |
Watch for divergence/volume drop |
Classic reversal with three tests of key level. |
Enter on break of neckline after third test |
Target height from neckline |
Stop above/below last peak/trough |
Head and Shoulders |
Reversal |
H&S Pattern, Volume |
Swing |
Intermediate |
Success rate ~68% (Bulkowski) |
Right shoulder should have lower volume |
Trade after neckline break confirms reversal. |
Enter on neckline break with volume |
Target measured move (head to neckline) |
Stop above right shoulder |
Simple Moving Average Crossover |
Trend |
SMA (20/50) |
Swing |
Beginner |
Win rate ~55-60% with trend filter |
Simple and widely used |
Use SMA crossover to follow trend direction. |
Enter when 20 SMA crosses above 50 SMA |
Exit on opposite crossover or key resistance |
Stop under last swing low |
Support Bounce |
Mean Reversion |
Horizontal Support, Candlesticks |
Swing |
Beginner |
~60% win rate near support with confirmation |
Good for sideways markets |
Buy when price bounces off horizontal support zone. |
Enter after bullish candle at support |
Target previous resistance or R:R target |
Stop under support zone |
Resistance Fade |
Mean Reversion |
Horizontal Resistance, RSI |
Swing |
Beginner |
~60% reversal probability at strong resistance |
Use RSI or volume to confirm |
Short after price rejects from resistance zone. |
Enter after bearish candle at resistance |
Target support or 1:2 R:R |
Stop above resistance zone |
RSI Overbought/Oversold |
Mean Reversion |
RSI(14) |
Swing |
Beginner |
~55-65% win rate with divergence or S/R |
Works well on large caps |
Trade reversals from extreme RSI levels. |
Enter when RSI 70 (sell) |
Exit when RSI returns to 50 |
Stop below/above recent swing |
Trendline Bounce |
Trend |
Manual Trendlines, Price Action |
Swing |
Beginner |
High R:R when respected |
Use with candlestick confirmation |
Buy dips in trend near drawn trendline. |
Enter after bullish reaction off trendline |
Exit at prior highs or upper channel |
Stop under trendline break |
Golden Cross |
Trend |
SMA(50) & SMA(200) |
Position |
Beginner |
Historically profitable in indices |
Long-term filter |
Buy long-term bullish crossovers. |
Enter when 50 SMA crosses above 200 SMA |
Exit on opposite cross or MA flattening |
Stop only for risk tolerance – wide stop |
52-Week High Momentum |
Breakout |
52-Week High Level |
Swing |
Beginner |
~58-65% win rate when combined with volume |
Momentum-based breakout |
Buy when price breaks 52-week high with momentum. |
Enter on close above 52-week high |
Exit at 1.5–2x risk or trailing high |
Stop under breakout candle |
Doji Reversal |
Reversal |
Doji Candle, Support/Resistance |
Intraday/Swing |
Beginner |
~60% win rate when combined with location |
Needs confirmation candle |
Doji at key level can precede reversal. |
Enter after follow-up bullish/bearish candle |
Exit at next S/R level |
Stop outside doji range |
Volume Spike Reversal |
Reversal |
Volume, Candles |
Swing |
Beginner |
~60% success near end of trend |
Watch for panic selling or buying |
Trade after unusual volume spikes indicating exhaustion. |
Enter on large candle + volume at S/R |
Exit at mean price or next resistance |
Stop below/above volume spike |
Moving Average Reversion |
Mean Reversion |
SMA(20), Price |
Swing |
Beginner |
Effective on mean-reverting assets |
Simple logic |
Trade when price strays far from MA and snaps back. |
Enter when price >5% away from SMA20 and shows reversal |
Exit when price returns to SMA |
Stop on breakout continuation |