Strategy Library

43 strategies with clear rules. Pick one, learn how it works, see a real example.

43
Strategies
7
Categories
12
Beginner-Friendly
All 43 Momentum 11 Trend Following 13 Breakout 4 Reversal 5 Mean Reversion 3 Volatility 5 Short / Bearish 2
Absolute Momentum
Buy stocks with strong recent returns in confirmed uptrends.
Momentum Long Beginner
Win 39%
PF 1.3
Sharpe 1.7
Trades 791
Return 28% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Momentum is the strongest factor in equity returns. Stocks that have gone up tend to continue going up — especially when the trend structure (above SMA) and momentum oscillator (RSI) confirm the move. The state-transition entry is critical: it fires once when the regime shifts, not repeatedly while conditions hold.
Pure absolute momentum: buy stocks whose N-period return exceeds a threshold, price is above a trend SMA, and RSI confirms strength. Uses a state-transition entry that fires only when conditions FIRST align (preventing re-entry every bar). No external data needed — purely indicator-based. Differs from Strength List which uses Finviz sector scraping, DB scoring, and relative momentum vs SPY.
Best in strong bull markets with clear sector leadership. Underperforms in range-bound or choppy markets where returns oscillate around the threshold.
Backtest Performance (20-stock avg, 3yr)
27.5% Strategy Return
162.7% Buy & Hold
-135.1% Alpha
39% Win Rate
1.70 Sharpe Ratio
-39.5% Max Drawdown
Entry Rules
  • 20-period return (%) > 3% minimum threshold (strong recent performance)
  • Close > SMA(50) — uptrend confirmed
  • RSI(14) > 50 — confirming strength, not just bouncing
  • State-transition: fires only on the first bar ALL conditions align
Stop Loss
  • Close minus 2 × ATR — standard volatility-based stop
Profit Target
  • Close plus 3 × ATR (1.5 × stop distance for 1.5:1 reward/risk)
Exit Rules
  • SMA(20) crosses below SMA(50) — momentum fading
  • OR RSI drops below 30 — strength evaporated
Key Indicators
20-day Return (%) SMA(50) RSI(14) SMA(20) SMA(50) ATR(14)
Example Trade
META
Setup
META had a 20-day return of +8%, price was well above the 50 SMA, and RSI was 62. Conditions first aligned after a consolidation breakout.
Entry
Entered at $510 on the first bar all conditions aligned (state transition).
Stop
Stop at $490 — entry minus 2 × ATR($10).
Target
Target at $540 — entry plus 3 × ATR.
Outcome
META continued to $545 over the next 3 weeks, riding strong momentum. The SMA(20) stayed above SMA(50) throughout, confirming the trend was intact.
Engine A strength_list (absolute momentum variant, won 6-2 vs Engine B)
CCI Momentum
Trade CCI breakouts above +100 or below -100.
Momentum Long & Short Intermediate
Click for entry, stop, target & example
Why It Works
CCI measures how far price has deviated from its statistical mean. Extreme positive readings indicate strong momentum that tends to persist, while reversals from extremes signal potential turning points.
The Commodity Channel Index (CCI) measures deviation from the mean. Readings above +100 indicate strong bullish momentum (not just overbought), readings below -100 indicate strong bearish momentum. Trade the momentum, not the extreme.
Best in trending markets where momentum readings stay elevated. Works well for identifying momentum acceleration and deceleration points.
Entry Rules
  • Long: CCI(10) crosses above -130 (oversold bounce) AND price above HMA(10)
  • Short: CCI(10) crosses below +130 (overbought drop) AND price below HMA(10)
Stop Loss
  • Place stop 2x ATR below entry
Profit Target
  • Target 3x ATR above entry
  • Or exit when CCI reaches the opposite extreme
Exit Rules
  • Exit when CCI crosses into overbought (+130) for longs
  • Exit when CCI crosses into oversold (-130) for shorts
  • Exit on HMA crossover
Key Indicators
CCI(10) HMA(10) ATR(14)
Example Trade
XOM
Setup
XOM had been basing and CCI(20) was near zero. Oil prices spiked, pushing XOM up sharply.
Entry
Entered long at $110 when CCI crossed above +100, confirming strong upward momentum.
Stop
Stop at $106 — 2x ATR below entry.
Target
Target at $118 — 3x ATR above entry. Also watched for CCI at +200.
Outcome
XOM rallied to $119 as oil momentum continued. CCI reached +185 before pulling back. Exited at $117 when CCI dropped below +100. Gained 6.4%.
Donald Lambert — Commodity Channel Index
Earnings Catalyst (Power Gap)
Buy stocks gapping up on massive earnings beats.
Momentum Long Intermediate
Win 42%
PF 1.4
Sharpe 0.1
Trades 320
Return 7% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Earnings surprises create information asymmetry. When a stock gaps up on strong earnings with institutional-level volume, the market is repricing the company's future. The gap often marks the start of a sustained move as more investors recognize the change.
Episodic pivots — stocks that gap up on huge earnings beats or other catalysts. The gap itself is the signal: institutional money is repositioning. Buy the gap and ride the momentum as analysts upgrade and new buyers pile in.
Best during earnings season when multiple companies report. Works when the gap is supported by fundamentally new information, not just short-covering or technical positioning.
Backtest Performance (20-stock avg, 3yr)
7.2% Strategy Return
162.7% Buy & Hold
-155.5% Alpha
42% Win Rate
0.05 Sharpe Ratio
-16.0% Max Drawdown
Entry Rules
  • Stock gaps up > 3% on earnings beat or catalyst
  • Volume on gap day is 1.5x+ the 20-day average — institutional participation
  • Green candle required (close > open) — gap must hold through the day
Stop Loss
  • Place stop at the low of the gap day candle minus 0.5x ATR
  • The gap should hold — if it fills, the thesis is broken
Profit Target
  • Target 4x ATR above entry
  • Let it run — earnings gaps often lead to multi-week trends
Exit Rules
  • Exit when close crosses below EMA(20) (momentum fading)
  • Time exit after 5 bars if no trend develops
Key Indicators
Gap % Volume ratio EMA(20) Green candle
Example Trade
NFLX
Setup
NFLX reported blowout subscriber growth. Stock gapped up 12% from $580 to $650 on 4x average volume.
Entry
Entered at $655 on the day after earnings — waited for the gap to hold.
Stop
Stop at $638 — the low of the gap day candle.
Target
Target at $720 — 10% above the gap close.
Outcome
NFLX continued higher to $730 over 3 weeks as analysts raised price targets. The massive gap volume showed institutional commitment.
Episodic Pivot / Power Earnings Gap
Gap and Go
Buy stocks gapping up at the open and riding the momentum.
Momentum Long Intermediate
Win 42%
PF 3.3
Sharpe 0.3
Trades 269
Return 13% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Opening gaps with strong volume represent overnight information being priced in. When a stock gaps up and holds above the gap level, it signals that the new price level is accepted — creating a base for further gains through the session.
Trade stocks that gap up significantly at the open (3%+) on high volume. The gap shows institutional urgency. If the stock holds above the gap open price in the first 15-30 minutes, the momentum often continues for the full day or multiple days.
Best during earnings season or after significant news events. Works when the gap has strong volume confirmation and the stock holds the gap level in the first 30 minutes.
Backtest Performance (20-stock avg, 3yr)
12.9% Strategy Return
162.7% Buy & Hold
-149.8% Alpha
42% Win Rate
0.31 Sharpe Ratio
-16.4% Max Drawdown
Entry Rules
  • Stock gaps up 3%+ at the open on above-average pre-market volume
  • Wait for the first 15-30 minutes — price must hold above the gap open
  • Enter when price breaks above the first 15-30 minute high
Stop Loss
  • Place stop below the gap open price (gap must hold)
  • Or below the first 15-minute low
Profit Target
  • Target 2x the gap percentage for day trades
  • For swing: hold 2-3 days with a trailing stop
Exit Rules
  • Exit if the gap fills (price drops below the prior day's close)
  • Day trade: exit before close
Key Indicators
Gap % Pre-market volume VWAP First 15-min range
Example Trade
SHOP
Setup
SHOP gapped up 5% to $78 on a partnership announcement. Pre-market volume was 3x normal.
Entry
Entered at $79 when price broke above the first 30-minute high, confirming the gap was holding.
Stop
Stop at $76.50 — below the gap open price.
Target
Target at $84 — 2x the gap distance above the open.
Outcome
SHOP ran to $85 by end of day as momentum traders piled in. The gap held all day — never tested the gap open. Exited at $83 for a 5% day trade.
Gap and go momentum trading
Jeff Sun Momentum
Buy leading stocks in confirmed uptrends — ATR trail lets winners run.
Momentum Long & Short Intermediate
Win 51%
PF inf
Sharpe 5.5
Trades 70
Return 47% vs 61% B&H
Click for entry, stop, target & example
Why It Works
The best trades come from leading stocks in confirmed uptrends that haven't yet attracted the crowd. By requiring structural alignment (golden cross) and restraint (not overextended), you catch stocks early in their acceleration phase. The ATR trail lets the trend do the work.
A systematic momentum approach that buys stocks above both the 15 and 100 SMA with faster trend detection, not overextended from the 15-MA, with RSI > 40 momentum. ATR trailing stop lets winners run instead of cutting them short.
Excels in bull markets with clear sector rotation and emerging leadership groups. Less effective in broad sell-offs or when all sectors move together.
Backtest Performance (20-stock avg, 3yr)
46.5% Strategy Return
61.3% Buy & Hold
-14.8% Alpha
51% Win Rate
5.47 Sharpe Ratio
-13.9% Max Drawdown
Entry Rules
  • Price is above both the 15 SMA and 100 SMA
  • SMA(15) is above SMA(100) — trend alignment
  • ADX(14) > 15 — mild trending condition required
  • Price is within 6x ATR(14) of the 15 SMA — not overextended
  • RSI(14) > 40 — confirming positive momentum
Stop Loss
  • Place stop 3x ATR(14) below entry
  • Progressive 3-stop system for position management (advanced)
Profit Target
  • Target is 5x ATR(14) above entry
  • Let winners run — ATR trail captures extended moves
Exit Rules
  • ATR trailing stop: 10-bar high minus 3.5×ATR
  • Trail adapts to volatility — holds through normal pullbacks, exits on trend breaks
Key Indicators
SMA(15) SMA(100) ATR(14) ADX(14) RSI(14) ATR trail
Example Trade
META
Setup
META was in a strong uptrend — golden cross confirmed 2 months prior. RSI at 58. Price was $485, only 2.1x ATR above the 50 SMA.
Entry
Entered at $486 after a 3-day consolidation confirmed the conditions held.
Stop
Stop at $471.60 — 3x ATR ($4.80) below entry.
Target
Target at $510 — 5x ATR above entry.
Outcome
META continued its trend. The ATR trailing stop held through a 2-day pullback that would have triggered the old SMA50 exit, capturing an additional 8% of upside.
Jeff Sun — jfsrev.substack.com
Keltner Channel Momentum
Buy breakouts above the upper Keltner Channel.
Momentum Long Intermediate
Win 40%
PF 1.3
Sharpe 1.2
Trades 580
Return 23% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Keltner Channels use ATR to define normal price range. When price breaks above the upper channel, it signals abnormal strength — momentum that often continues. The ATR-based envelope adapts to each stock's volatility.
Keltner Channels are volatility-based envelopes around an EMA. When price closes above the upper channel with MACD(8,17,9) momentum, it signals strong breakout momentum. Exit patiently when price drops back below the upper channel.
Best in stocks showing expanding volatility and directional momentum. Less effective in low-volatility, sideways markets where channel breaks produce false signals.
Backtest Performance (20-stock avg, 3yr)
23.1% Strategy Return
162.7% Buy & Hold
-139.6% Alpha
40% Win Rate
1.18 Sharpe Ratio
-27.7% Max Drawdown
Entry Rules
  • Price closes above the upper Keltner Channel (EMA30 + 2×ATR)
  • MACD(8,17,9) histogram is positive — momentum confirmed
  • RSI(14) below 75 — not yet overbought
Stop Loss
  • 2.5x ATR below entry (widened from 2.0× to reduce whipsaws)
Profit Target
  • 3x ATR above entry
Exit Rules
  • Exit when price drops back below the upper Keltner Channel
Key Indicators
Keltner Channel(30,2) EMA(30) MACD(8,17,9) ATR(14) RSI(14)
Example Trade
TSLA
Setup
TSLA was consolidating within Keltner Channels for 10 days. The upper channel was at $250.
Entry
Entered long at $253 when price closed above the upper Keltner Channel on strong volume.
Stop
Stop at $243 — the middle Keltner band (20 EMA).
Target
Trail stop at the 20 EMA — ride the momentum.
Outcome
TSLA ran to $275 over the next week as momentum accelerated. Exited at $270 when price dipped back to the middle band.
Keltner Channel breakout system
MACD + Bollinger Band Combo
Combine MACD momentum with Bollinger Band extremes for high-confidence entries.
Momentum Long & Short Intermediate
Win 71%
PF 5.1
Sharpe 8.0
Trades 1272
Return 4270% vs 65% B&H
Click for entry, stop, target & example
Why It Works
Combining MACD momentum with Bollinger Band volatility creates a dual confirmation system. MACD identifies the direction of momentum while Bollinger Bands identify when price is at an extreme — together they pinpoint high-probability entry zones.
Combines MACD momentum with Bollinger Band exits. Enter on MACD crossover with RSI confirmation; use Bollinger Bands as profit-taking exits. Autoresearch found removing the BB touch entry requirement increased performance by +131%.
Works across market conditions but best when both indicators confirm simultaneously. The Bollinger Band component adds a volatility filter that reduces whipsaws.
Backtest Performance (20-stock avg, 3yr)
4269.7% Strategy Return
64.7% Buy & Hold
+4205.0% Alpha
71% Win Rate
8.03 Sharpe Ratio
-24.8% Max Drawdown
Entry Rules
  • Long: MACD(8,21) bullish crossover AND RSI < 70
  • Short: MACD(8,21) bearish crossover AND RSI > 30
Stop Loss
  • 4x ATR from entry bar (wider stop reduces premature exits)
Profit Target
  • Target the upper Bollinger Band for longs
  • Target the lower Bollinger Band for shorts
Exit Rules
  • Exit on opposite MACD crossover
  • Exit when price reaches the opposite Bollinger Band
Key Indicators
MACD(8,21,5) Bollinger Bands(20,2) RSI(14) ATR(14)
Example Trade
NFLX
Setup
NFLX pulled back to the lower Bollinger Band at $600. At the same time, MACD was about to cross bullish.
Entry
Entered at $605 when MACD crossed above the signal line while price was at the lower band.
Stop
Stop at $588 — below the lower Bollinger Band.
Target
First target at $625 (middle band/20 SMA). Full target at $650 (upper band).
Outcome
NFLX bounced from $605 to $645 in 10 days. The dual confirmation of oversold price + bullish momentum gave a high-confidence entry.
MACD + Bollinger Band dual confirmation
Momentum MACD
Long-only MACD crossover + dual MA alignment with ATR trailing exit.
Momentum Long & Short Intermediate
Win 43%
PF 3.8
Sharpe 1.7
Trades 146
Return 52% vs 163% B&H
Click for entry, stop, target & example
Why It Works
When MACD momentum aligns with dual MA trend direction, you get confirmation from two independent systems. The ATR trailing exit replaces the old MACD-cross exit that cut winners short on every pullback.
MACD(12,26) crossover combined with EMA(10) > EMA(30) dual MA trend confirmation. Long-only with ATR trailing exit that lets winners run instead of cutting on the first MACD pullback. RSI < 75 filters out overbought entries.
Best in markets with clear momentum trends. The dual momentum filter helps avoid trades during momentum transitions.
Backtest Performance (20-stock avg, 3yr)
51.7% Strategy Return
162.7% Buy & Hold
-111.0% Alpha
43% Win Rate
1.69 Sharpe Ratio
-29.4% Max Drawdown
Entry Rules
  • MACD(12,26) crosses above signal line — momentum shifting bullish
  • EMA(10) > EMA(30) — fast MA above slow confirms uptrend
  • RSI(14) < 75 — not overbought
Stop Loss
  • Stop at 3x ATR below entry — wider stop avoids premature shakeouts
Profit Target
  • Target at 5x ATR above entry
  • ATR trailing exit captures most gains
Exit Rules
  • ATR trailing stop: exit when close drops below rolling 10-bar high minus 3.5x ATR
Key Indicators
MACD(12,26,9) EMA(10) EMA(30) RSI(14) ATR(14)
Example Trade
GOOGL
Setup
GOOGL had EMA(10) above EMA(30) in a steady uptrend. MACD crossed bullish with RSI at 58.
Entry
Entered long at $165 on MACD bullish crossover with dual MA confirmation.
Stop
Stop at $157 — 3x ATR below entry.
Target
Target at $185 — 5x ATR above entry. ATR trail as primary exit.
Outcome
GOOGL trended to $182 over 3 weeks. ATR trailing stop locked in gains at $176 when momentum paused — far better than the old MACD cross exit at $170.
MACD momentum + dual moving average trend filter
Power Earnings Gap
Buy stocks gapping up 10%+ on 5x volume after a tight consolidation base.
Momentum Long Intermediate
Win 42%
PF 2.3
Sharpe 1.5
Trades 182
Return 8% vs 70% B&H
Click for entry, stop, target & example
Why It Works
Power earnings gaps are institutional re-rating events — the market permanently revalues the stock at a higher level. The tight base before the gap confirms controlled accumulation; the explosive volume confirms conviction. These gaps rarely fill because institutions are still buying on the way up.
Episodic pivot play — a stock consolidates tightly for 3–6 weeks on dry volume, then gaps up explosively (10%+) on a catalyst with institutional-level volume (5x+). The gap is the entry signal; the gap-day open becomes an untouchable floor. Hold while price stays above EMA(21). Inspired by FSLY Feb 2026: 5-week base, +44.9% gap on 17.9x RVOL, doubled from gap open in 6 weeks.
Best after earnings beats, product launches, or analyst upgrades that fundamentally change the investment thesis. Works best when the stock had been consolidating sideways for weeks — pent-up energy amplifies the move.
Backtest Performance (17-stock avg, 3yr)
8.2% Strategy Return
70.1% Buy & Hold
-61.8% Alpha
42% Win Rate
1.46 Sharpe Ratio
-14.0% Max Drawdown
Entry Rules
  • Gap up > 10% at open vs prior close — power catalyst, not a noise move
  • Volume surge > 5x 20-day average — institutional accumulation confirmed
  • Green candle: close > open — gap held through the session
  • Optional (V0): pre-gap 15-bar range / close < 30% — tight consolidation base
Stop Loss
  • Stop: gap-day low minus 0.5x ATR(14) — frozen at entry bar
  • Gap fill (close below gap-day open) invalidates the setup
Profit Target
  • Target: 5x ATR above entry (wider than earnings_catalyst — power gaps have more momentum)
  • No fixed target — let EMA(21) trailing exit manage the trade
Exit Rules
  • Close crosses below EMA(21) — trend exhausted
  • Time exit: 20 bars via BacktestConfig
Key Indicators
ATR(14) EMA(21) Volume Ratio (20d avg) Gap %
Example Trade
FSLY
Setup
5 weeks of tight consolidation ($8–$10 range, sub-1x RVOL). RSI drifted to 21–25. Shakeout to $7.87 then quiet recovery to $9.31 the day before the gap.
Entry
Feb 12, 2026: +44.9% gap on 17.9x RVOL. Entered at gap-day close ~$16.
Stop
Gap-day low ($13.49, the gap-open) minus 0.5x ATR. Gap open = hard floor.
Target
5x ATR above entry (~$27). Price reached $28.75 within 6 weeks.
Outcome
Stock doubled from gap open ($13.49 → $28.75) without filling the gap. EMA(21) exit at ~$26 after 6 weeks = +63% from entry.
Mark Minervini / Gil Morales — Episodic Pivot concept
Prime Pullback
Buy high-momentum stocks pulling back to the 21 EMA.
Momentum Long Beginner
Win 37%
PF 1.2
Sharpe 1.6
Trades 956
Return 30% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Trending stocks that pull back to the 21 EMA on declining volume are simply taking a breather. The pullback shakes out weak hands while the underlying demand remains intact, creating a low-risk entry point.
A straightforward momentum pullback strategy. Find stocks that have been trending up (month up, above 20 and 50 SMA) with high volume, then buy the pullback to the 21 EMA. The first pullback in a new trend is the highest-probability entry.
Works in steadily trending markets where pullbacks are shallow and short-lived. Less effective when pullbacks deepen into full corrections.
Backtest Performance (20-stock avg, 3yr)
29.9% Strategy Return
162.7% Buy & Hold
-132.8% Alpha
37% Win Rate
1.63 Sharpe Ratio
-33.8% Max Drawdown
Entry Rules
  • Stock has been up over the past month (trending)
  • Price is above both the 20 SMA and 50 SMA
  • Volume is above 1M average (institutional interest)
  • Price pulls back to touch or come within 1% of the 21 EMA
Stop Loss
  • Place stop below the 50 SMA or 2x ATR below entry
  • The 50 SMA is the line in the sand — trend is intact above it
Profit Target
  • Target the recent high (prior to the pullback)
  • Or target 2-3x ATR above entry
Exit Rules
  • Exit if price closes below the 50 SMA
  • Exit after 10 days if no bounce from the 21 EMA
Key Indicators
EMA(21) SMA(20) SMA(50) Volume
Example Trade
LLY
Setup
LLY had been trending up for 6 weeks. It pulled back 4% from $780 to $750, right to the 21 EMA. The 50 SMA was at $720, well below.
Entry
Entered at $752 as price bounced off the 21 EMA with a bullish engulfing candle.
Stop
Stop at $735 — below the 50 SMA zone.
Target
Target at $790 — retesting the recent high.
Outcome
LLY bounced from the 21 EMA and hit $795 in 8 days. First pullbacks in strong trends are the highest-probability entries.
Pullback to the 21 EMA — momentum classic
Strength List (Sector Momentum)
Buy the strongest stocks in the strongest sectors.
Momentum Long Beginner
Win 43%
PF 1.1
Sharpe 0.5
Trades 1055
Return 10% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Sector rotation drives the market. By identifying the strongest sector and buying its leading stocks, you align with the dominant flow of institutional money. Relative strength tends to persist over weeks to months.
A top-down approach: first identify the strongest sectors based on monthly performance, then buy the strongest individual stocks within those sectors. Ride the tide of sector rotation and institutional money flow.
Excels when clear sector leadership exists and rotation is orderly. Less effective during market-wide sell-offs where correlations spike and all sectors decline together.
Backtest Performance (20-stock avg, 3yr)
9.6% Strategy Return
162.7% Buy & Hold
-153.1% Alpha
43% Win Rate
0.48 Sharpe Ratio
-39.3% Max Drawdown
Entry Rules
  • Identify the top 3 performing sectors over the past month
  • Within those sectors, rank stocks by monthly performance
  • Buy the top 5-10 stocks from leading sectors
Stop Loss
  • Place stop 2x ATR below entry for each position
  • Or use a 7-10% trailing stop
Profit Target
  • Use 5x ATR above entry as a planning anchor — actual exit is driven by sector rotation (monthly rebalance)
Exit Rules
  • Exit when the sector drops out of the top 3
  • Exit individual stocks that fall below their 50 SMA
Key Indicators
Sector performance rank Monthly momentum SMA(50) RS vs SPY
Example Trade
XLK (Tech sector)
Setup
Technology was the #1 sector for 2 consecutive months. Within tech, NVDA, AVGO, and CRM had the strongest monthly returns.
Entry
Allocated to the top 5 tech stocks weighted by momentum. Average entry across the basket.
Stop
Individual stops at 2x ATR for each stock.
Target
Monthly rebalance — rotate into whatever sectors lead next month.
Outcome
The tech basket gained 8% over the month. At month-end, healthcare took the lead, so rotated into XLV stocks. Riding sector momentum avoids fighting the tape.
Sector rotation / relative strength
Deep Trend Pullback
Long-only: buy pullbacks to EMA(50) in a strong SMA(150) uptrend with trailing EMA(40) exit.
Trend Following Long Intermediate
Win 80%
PF inf
Sharpe 14.2
Trades 142
Return 10% vs 63% B&H
Click for entry, stop, target & example
Why It Works
Deep trend pullbacks capture the natural rhythm of trending stocks — they advance, consolidate near a key moving average, then resume the trend. By requiring the long-term SMA(150) uptrend as a filter, this strategy only enters the highest-probability setups where the underlying trend is firmly established.
Enters when price pulls back to within 0.5x ATR of the 50-day EMA while remaining above the 150-day SMA. Requires price to have been above EMA(50) recently — capturing genuine pullbacks, not breakdowns. Exits via EMA(40) trailing stop ratcheted upward.
Best in established uptrends where stocks regularly bounce off the 50-day EMA. Performs well with large-cap momentum names that respect moving average support.
Backtest Performance (20-stock avg, 3yr)
10.1% Strategy Return
63.3% Buy & Hold
-53.2% Alpha
80% Win Rate
14.24 Sharpe Ratio
-0.4% Max Drawdown
Entry Rules
  • Price above SMA(150) — confirmed long-term uptrend
  • Price was recently above EMA(50) — genuine pullback, not breakdown
  • Price within 0.5x ATR of EMA(50) — touching the moving average support
Stop Loss
  • Initial stop: low of entry bar minus 1.5x ATR(14)
  • Stop is frozen at entry — does not float with price
Profit Target
  • No fixed target — let the trailing stop manage exits
  • EMA(40) minus 0.2x ATR buffer as trailing stop, ratcheted upward
Exit Rules
  • Close below EMA(40) trailing stop (adjusted with 0.2x ATR buffer)
  • Trailing stop only moves up, never down — locks in profits
Key Indicators
EMA(50) SMA(150) ATR(14) EMA(40)
Example Trade
AAPL
Setup
AAPL in a confirmed uptrend — above SMA(150) at $175, EMA(50) at $182.
Entry
Price pulled back from $190 to $183, within 0.5x ATR ($1.50) of EMA(50). Entered at $183.
Stop
Stop at $180.50 — low of entry bar ($182) minus 1.5x ATR($1.50).
Target
No fixed target — trailing EMA(40) stop manages the exit.
Outcome
Price resumed uptrend to $200. EMA(40) trailing stop triggered exit at $195 when price dipped through.
Autoresearch optimization of VCP patterns
EMA Cross Fast
Ultra-fast EMA(2/5) crossover with no ADX filter — maximum signal capture.
Trend Following Long & Short Intermediate
Win 69%
PF 6.3
Sharpe 9.4
Trades 1630
Return 6526% vs 65% B&H
Click for entry, stop, target & example
Why It Works
Removing the ADX filter and using ultra-fast EMAs dramatically increases signal frequency. In trending markets, more entries = more captured momentum. The wider ATR stop (3.5x vs 2x) compensates for the noisier signal. Best when you want maximum coverage of momentum moves rather than selective high-conviction entries.
Autoresearch-optimized crossover using EMA(2) and EMA(5) with no ADX trend filter. Designed to capture all momentum moves including early-stage trends. Generates ~7x more signals than the filtered EMA Crossover. Best on high-momentum stocks (NVDA, TSLA, CAT); avoid reversal-prone names where churn destroys returns.
Trending bull markets with clear directional momentum. Outperforms on high-momentum names (CAT +187%, MSTR +89%, NFLX +102% in 5y backtest). Underperforms on reversal-heavy names (COIN, ENPH, XYZ) — pair with a momentum filter for those.
Backtest Performance (20-stock avg, 3yr)
6526.3% Strategy Return
64.7% Buy & Hold
+6461.6% Alpha
69% Win Rate
9.36 Sharpe Ratio
-18.4% Max Drawdown
Entry Rules
  • Long: EMA(2) crosses above EMA(5)
  • Short: EMA(2) crosses below EMA(5)
  • No ADX filter — all crossovers qualify
Stop Loss
  • Place stop 3.5x ATR(7) below entry (frozen at entry bar)
  • Wider stop than filtered EMA Crossover — compensates for more noise signals
Profit Target
  • Target 7.0x ATR(7) above entry (frozen at entry bar)
  • 2:1 reward-risk built into the target/stop ratio
Exit Rules
  • Exit on opposite crossover — EMA(2) crosses below EMA(5) for longs
Key Indicators
EMA(2) EMA(5) ATR(7)
Example Trade
CAT
Setup
CAT was in a strong uptrend. EMA(2) had been tracking closely below EMA(5) during a 3-day pause.
Entry
Entered long at $350 when EMA(2) crossed above EMA(5) on the breakout bar.
Stop
Stop at $337 — 3.5x ATR(7) below entry, giving room for the fast EMAs to breathe.
Target
Target at $376 — 7x ATR(7) above entry.
Outcome
CAT continued its uptrend and hit the target within 2 weeks. The wide stop avoided being shaken out by a brief 1-day pullback.
Autoresearch: day_ema_cross_20260317_194205
EMA Crossover
Trade when the 9 EMA crosses the 21 EMA.
Trend Following Long & Short Beginner
Win 34%
PF 1.5
Sharpe 1.5
Trades 346
Return 19% vs 63% B&H
Click for entry, stop, target & example
Why It Works
Moving average crossovers capture the transition from one trend to another. When a faster EMA crosses above a slower one, it confirms that recent price momentum has shifted — a simple but effective trend-following signal.
The simplest trend-following signal: go long when the fast EMA (9) crosses above the slow EMA (21), go short when it crosses below. Best combined with a trend filter like the 200 SMA to avoid false signals in ranges.
Works best in trending markets where momentum persists. Generates frequent false signals in choppy, range-bound conditions.
Backtest Performance (20-stock avg, 3yr)
18.6% Strategy Return
63.3% Buy & Hold
-44.8% Alpha
34% Win Rate
1.48 Sharpe Ratio
-23.2% Max Drawdown
Entry Rules
  • Long: EMA(9) crosses above EMA(21)
  • ADX(14) must be > 15 (confirms trending market — lowered from 20 for better coverage)
  • Short: EMA(9) crosses below EMA(21)
Stop Loss
  • Place stop 2x ATR below entry (frozen at entry bar)
  • Simplified fixed stop — no trailing ratchet
Profit Target
  • Target 4x ATR above entry (frozen at entry bar)
  • No trailing — let the crossover exit handle it
Exit Rules
  • Exit on the opposite crossover (EMA(9) crosses back below EMA(21) for longs)
Key Indicators
EMA(9) EMA(21) ADX(14) ATR(14)
Example Trade
AMZN
Setup
AMZN was above its 200 SMA in an uptrend. The 9 EMA had been below the 21 EMA for 2 weeks during a pullback.
Entry
Entered long at $185 when the 9 EMA crossed above the 21 EMA.
Stop
Stop at $180 — 1.5x ATR below entry.
Target
Trail stop at the 21 EMA — no fixed target.
Outcome
AMZN trended to $198 over 3 weeks before the 9 EMA crossed back below the 21 EMA. Exited at $195 for a 5.4% gain.
Classic EMA crossover system
Golden Cross
EMA(3/8) crossover with Supertrend(7,1.3) trailing exit.
Trend Following Long Beginner
Win 66%
PF 4.2
Sharpe 6.1
Trades 591
Return 103% vs 63% B&H
Click for entry, stop, target & example
Why It Works
The golden cross (50 SMA crossing above 200 SMA) is one of the most widely watched technical signals. The optimized V0 uses fast EMA(3/8) to catch trends earlier and Supertrend(7,1.3) to trail stops tightly, reducing drawdown on volatile names.
Autoresearch-optimized golden cross using fast EMA(3/8) crossover for entries and Supertrend(7,1.3) for trailing exits. Catches trend shifts early while riding winners. Legacy variant preserves the classic SMA(50/200) golden cross.
Works across all cap sizes. V0 excels in volatile trending markets; V1 best for major indices and large-cap stocks where institutional flows dominate.
Backtest Performance (20-stock avg, 3yr)
103.3% Strategy Return
63.3% Buy & Hold
+40.0% Alpha
66% Win Rate
6.08 Sharpe Ratio
-11.5% Max Drawdown
Entry Rules
  • V0: EMA(3) crosses above EMA(8)
  • V1 (legacy): SMA(50) crosses above SMA(200), RSI < 70
Stop Loss
  • V0: Supertrend(7,1.3) trailing stop
  • V1: price - 2.5x ATR
Profit Target
  • V0: Ride until Supertrend flips bearish
  • V1: price + 5-8x ATR
Exit Rules
  • V0: Supertrend flips bearish OR EMA death cross
  • V1: Death cross (SMA50 below SMA200)
Key Indicators
EMA(3) EMA(8) Supertrend(7,1.3) SMA(50) SMA(200)
Example Trade
QQQ
Setup
QQQ's 50 SMA had been below the 200 SMA for 6 months during a bear market. In January, the 50 SMA started curving up toward the 200.
Entry
Entered at $350 when the 50 SMA crossed above the 200 SMA. Volume was 1.5x average.
Stop
Stop below the 200 SMA at $330.
Target
Hold until death cross — no fixed target.
Outcome
QQQ rallied from $350 to $420 over 5 months following the golden cross. The major trend change signal caught the new bull market early.
Autoresearch optimization of classic golden cross / death cross
Holy Grail
Long-only: buy strong trends pulling back to the 20 EMA with trailing EMA exit.
Trend Following Long & Short Intermediate
Win 44%
PF inf
Sharpe 3.0
Trades 37
Return 4% vs 176% B&H
Click for entry, stop, target & example
Why It Works
Strong trends don't die easily — they pull back to the mean and resume. When ADX confirms genuine trend strength and price returns to the 20 EMA, you're buying temporary weakness in a proven trend.
Linda Raschke's classic strategy that waits for a stock in a strong trend (ADX > 20, +DI > -DI) to pull back to the 20-period EMA, then enters on a buy-stop above the touch bar. Long-only — shorts were net negative across 91 variants. Niche signal generator (~2 trades per ticker over 5 years).
Works best when the broad market is trending and individual stocks show sustained directional movement. Avoid during choppy, range-bound markets where ADX readings whipsaw. Low trade frequency — this is a niche signal, not a high-volume system.
Backtest Performance (17-stock avg, 3yr)
4.3% Strategy Return
176.0% Buy & Hold
-171.7% Alpha
44% Win Rate
3.01 Sharpe Ratio
-4.7% Max Drawdown
Entry Rules
  • ADX(14) > 20 and rising over 3 bars — confirms directional trend
  • +DI > -DI — ensures the trend is bullish, not just strong
  • Price > SMA(50) — above medium-term trend
  • Price pulls back to within 0.5x ATR of 20 EMA (must have been above for 5+ bars)
  • Buy-stop: enter when close breaks above the touch bar's high
Stop Loss
  • Stop at pullback swing low minus 0.3x ATR(14)
  • Tight stop keeps risk small for niche, high-conviction setups
Profit Target
  • Target is 4x ATR(14) above entry
  • EMA trailing exit captures gains before full target if trend weakens
Exit Rules
  • Trailing stop: exit when close drops below EMA(20)
  • EMA trail ratchets up — never moves down
Key Indicators
ADX(14) +DI/-DI EMA(20) SMA(50) ATR(14)
Example Trade
NVDA
Setup
NVDA had been trending up strongly for 3 weeks. ADX was at 32 and rising, +DI > -DI. Price pulled back from $135 to $128, touching the 20 EMA.
Entry
Entered at $129.50 when price broke above the touch bar high. Price > SMA(50) confirmed uptrend.
Stop
Stop placed at $127.90 — pullback swing low minus 0.3x ATR.
Target
Target set at $137 — 4x ATR above entry. EMA trail as backup exit.
Outcome
Price resumed the uptrend. EMA trailing stop locked in gains at $133 when price briefly dipped below the rising 20 EMA.
Linda Raschke — Street Smarts
Ichimoku Cloud
Trade with the cloud — buy above it, sell below it.
Trend Following Long & Short Advanced
Win 72%
PF 4.8
Sharpe 9.8
Trades 592
Return 307% vs 65% B&H
Click for entry, stop, target & example
Why It Works
Ichimoku Cloud provides a complete picture of support, resistance, momentum, and trend direction in a single view. When price is above the cloud and all five lines align bullishly, the probability of continued upside is high.
The Ichimoku Cloud system provides support/resistance (the cloud), trend direction, momentum, and entry signals all in one indicator. When price is above a green cloud, the trend is bullish. The Tenkan/Kijun cross provides entry timing. Optimized with faster periods (5/11/22) and an ATR trailing stop — functionally long-only.
Works best in trending markets where the cloud provides clear support. The cloud's forward projection helps identify potential support/resistance zones before price arrives.
Backtest Performance (20-stock avg, 3yr)
306.7% Strategy Return
64.7% Buy & Hold
+242.1% Alpha
72% Win Rate
9.77 Sharpe Ratio
-12.5% Max Drawdown
Entry Rules
  • Tenkan-sen (3) crosses above Kijun-sen (7) — the entry trigger
  • Close above Kijun-sen (relaxed from cloud_top — autoresearch finding)
  • RSI(14) below 75
Stop Loss
  • Place stop 5×ATR below entry (wide stop for trend patience)
Profit Target
  • Target 3.5×ATR above entry
  • Exit on Tenkan/Kijun bearish cross or close below cloud bottom
Exit Rules
  • Exit when Tenkan crosses below Kijun
  • Exit when close falls below cloud bottom
Key Indicators
Tenkan-sen(3) Kijun-sen(7) Senkou Span A/B (14) ATR(14)
Example Trade
V
Setup
Visa was trading above a green (bullish) cloud. After a pullback to the Kijun-sen, the Tenkan crossed back above the Kijun.
Entry
Entered at $280 on the Tenkan/Kijun bullish crossover above the cloud.
Stop
Stop at $270 — the top of the cloud (Senkou Span B).
Target
Trail stop at the Kijun-sen line. No fixed target.
Outcome
V trended from $280 to $305 over 6 weeks. The cloud provided clear support and the Kijun trail kept the position open through minor pullbacks.
Goichi Hosoda — Ichimoku Kinko Hyo
MACD Trend
Follow the trend using MACD line and signal line crossovers.
Trend Following Long & Short Beginner
Win 36%
PF 1.4
Sharpe 0.1
Trades 303
Return 14% vs 61% B&H
Click for entry, stop, target & example
Why It Works
MACD measures the convergence and divergence of moving averages, capturing momentum shifts before they're visible on price alone. Signal line crossovers identify when momentum is accelerating in a new direction.
Classic MACD crossover: go long when the MACD line crosses above the signal line, short when it crosses below. The histogram shows momentum strength. Best when combined with price above/below the 200 SMA as a trend filter.
Works well in trending markets with clear directional moves. Generates whipsaws in range-bound markets — pair with trend filters for better results.
Backtest Performance (20-stock avg, 3yr)
13.9% Strategy Return
61.3% Buy & Hold
-47.4% Alpha
36% Win Rate
0.09 Sharpe Ratio
-19.6% Max Drawdown
Entry Rules
  • Long: MACD line crosses above signal line (bullish crossover)
  • Short: MACD line crosses below signal line (bearish crossover)
  • Filter: only longs when price > SMA(50), shorts when price < SMA(50)
Stop Loss
  • Place stop 3x ATR below entry
Profit Target
  • Target 3.5x ATR above entry, or trail stop using MACD histogram direction
Exit Rules
  • Exit when MACD line crosses below signal line
Key Indicators
MACD(5,13,8) SMA(50) ATR(14)
Example Trade
SPY
Setup
SPY was above its 200 SMA. MACD had been below the signal line for 2 weeks during a pullback.
Entry
Entered long at $450 when MACD crossed above the signal line with the histogram turning positive.
Stop
Stop at $429 — 3x ATR below entry.
Target
Trailed stop using MACD histogram — held until it peaked and turned down.
Outcome
SPY rallied to $468 before the MACD histogram peaked. Exited at $465 for a 3.3% gain over 2 weeks.
Gerald Appel — MACD
OBV Trend
Follow On-Balance Volume to confirm price trends with volume.
Trend Following Long & Short Intermediate
Win 69%
PF 4.8
Sharpe 10.8
Trades 736
Return 371% vs 61% B&H
Click for entry, stop, target & example
Why It Works
On-Balance Volume tracks the cumulative flow of volume. When OBV trends upward while price consolidates, smart money is accumulating — a leading signal that price will eventually follow the volume trend.
On-Balance Volume (OBV) adds volume on up days and subtracts on down days, creating a running total that shows buying/selling pressure. When OBV crosses above its moving average, it confirms bullish volume flow. Divergences between OBV and price warn of reversals.
Most effective when OBV diverges from price (leading indicator). Works well in stocks with meaningful volume patterns and institutional participation.
Backtest Performance (20-stock avg, 3yr)
370.9% Strategy Return
61.3% Buy & Hold
+309.6% Alpha
69% Win Rate
10.75 Sharpe Ratio
-9.6% Max Drawdown
Entry Rules
  • Long: OBV fast EMA(4) crosses above slow EMA(8) AND RSI(8) < 70
  • Short: OBV fast EMA(4) crosses below slow EMA(8) AND RSI(8) > 30
  • No price trend filter on entry — RSI controls entry quality
Stop Loss
  • Place stop 2x ATR below entry
Profit Target
  • Target 3x ATR above entry
  • Or hold until OBV fast EMA crosses back below slow EMA
Exit Rules
  • Exit when OBV fast EMA crosses back below slow EMA for longs
  • Exit when price crosses below trend EMA(20)
  • Exit when RSI(8) crosses above 70 (overbought)
Key Indicators
OBV OBV EMA(4) OBV EMA(8) EMA(20) RSI(8) ATR(14)
Example Trade
UBER
Setup
UBER was basing near $70. While price was flat, OBV was quietly rising — accumulation by institutions.
Entry
Entered at $72 when OBV crossed above its 20-period SMA, confirming the hidden accumulation.
Stop
Stop at $68 — 2x ATR below entry.
Target
Target at $80 — 3x ATR above entry.
Outcome
UBER broke out to $82 in 3 weeks. The rising OBV had been the early warning that buyers were accumulating before the price move.
Joe Granville — On-Balance Volume
SMA Trend
Stay long when price is above both the 50 and 200 SMA.
Trend Following Long Beginner
Win 31%
PF 1.2
Sharpe 1.0
Trades 992
Return 26% vs 163% B&H
Click for entry, stop, target & example
Why It Works
The simplest form of trend-following — if price is above both the 50 and 200 SMA, the trend is up at both the intermediate and long-term timeframe. You're simply staying on the right side of the major trend.
The simplest possible trend-following strategy. Stay long when price is above both the 50 and 200 SMA, and the stock is within 15% of its 52-week high. Go to cash when these conditions break. Low maintenance, suitable for position trading.
Works in sustained bull markets where trends persist for months. The dual-SMA filter naturally keeps you out during corrections and bear markets.
Backtest Performance (20-stock avg, 3yr)
26.4% Strategy Return
162.7% Buy & Hold
-136.2% Alpha
31% Win Rate
1.02 Sharpe Ratio
-32.8% Max Drawdown
Entry Rules
  • Price is above both SMA(50) and SMA(200)
  • Stock is within 15% of its 52-week high
  • Volume is above 500K average (liquid market)
Stop Loss
  • Exit if price closes below the 200 SMA for 2 consecutive days
Profit Target
  • Use 5x ATR above entry as a planning anchor — hold as long as price stays above SMA(50) and within 15% of 52-week high
Exit Rules
  • Exit when price drops below the 50 SMA
  • Exit when stock falls more than 15% from its 52-week high
Key Indicators
SMA(50) SMA(200) 52-week High distance
Example Trade
MSFT
Setup
MSFT was above both the 50 and 200 SMA, trading at $410 (8% below its 52-week high of $445).
Entry
Entered at $410 — all trend conditions met.
Stop
Would exit if MSFT closed below the 200 SMA at $375.
Target
No target — hold as long as trend conditions hold.
Outcome
Held for 4 months as MSFT trended from $410 to $455. Exited when it broke below the 50 SMA at $440 during a rotation. Captured 7.3% with minimal active management.
Simple moving average trend system
SuperTrend Pullback
Buy pullback recoveries in SuperTrend-confirmed uptrends.
Trend Following Long Intermediate
Win 83%
PF 92.2
Sharpe 10.6
Trades 270
Return 467% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Pullbacks in strong trends offer the best risk/reward entries. The SuperTrend indicator acts as a trend guard — you only buy pullbacks when the overall trend is confirmed bullish. The EMA reclaim gives you a precise entry point after the dip.
Uses the SuperTrend indicator as the primary trend direction filter. When SuperTrend is bullish, wait for price to dip below a single EMA and then reclaim it — this pullback recovery is the entry signal. RSI must be recovering (above 40) to avoid catching falling knives. Differs from Prime Pullback which uses a 3-EMA cloud on High/Close/Low.
Works best in steady uptrends with shallow, brief pullbacks. Avoid during choppy, range-bound markets where the SuperTrend flips frequently.
Backtest Performance (20-stock avg, 3yr)
467.3% Strategy Return
162.7% Buy & Hold
+304.7% Alpha
83% Win Rate
10.56 Sharpe Ratio
-5.8% Max Drawdown
Entry Rules
  • SuperTrend(10, 3.0) direction must be bullish (uptrend confirmed)
  • Price was below EMA(21) yesterday, reclaims above EMA today (pullback recovery)
  • RSI(14) > 40 — recovering, not deeply oversold
Stop Loss
  • SuperTrend line minus 0.5 × ATR — just below the trailing support
Profit Target
  • Entry price + 1.5 × ATR multiplier × ATR (reward > risk)
Exit Rules
  • SuperTrend flips from bullish to bearish — trend has reversed
Key Indicators
SuperTrend(10, 3.0) EMA(21) RSI(14) ATR(14)
Example Trade
NVDA
Setup
NVDA was in a strong uptrend with SuperTrend bullish. Price dipped below the 21 EMA for 2 days, then reclaimed it with RSI at 52.
Entry
Bought at $128 when price closed above the 21 EMA while SuperTrend remained bullish.
Stop
Stop at $122 — SuperTrend line ($123.50) minus 0.5 × ATR.
Target
Target at $140 — entry plus 1.5 × ATR-based target.
Outcome
NVDA continued higher to $142 over the next 2 weeks. The pullback to the 21 EMA was a textbook buying opportunity in a SuperTrend-confirmed uptrend.
Engine A prime_pullback (SuperTrend variant, won 8-0 vs Engine B)
Supertrend
Follow a volatility-based trailing stop that flips between bull and bear.
Trend Following Long & Short Beginner
Win 41%
PF 1.6
Sharpe 2.7
Trades 511
Return 29% vs 63% B&H
Click for entry, stop, target & example
Why It Works
Supertrend combines trend direction with ATR-based volatility bands. It flips from bullish to bearish only when price crosses the volatility-adjusted threshold, making it adaptive to each stock's natural movement range.
Supertrend is a single-line indicator that sits below price in uptrends (support) and above price in downtrends (resistance). It uses ATR to dynamically adjust. When price crosses the Supertrend line, the trend flips.
Excels in trending markets with moderate volatility. The ATR-based calculation automatically adjusts to high and low volatility regimes.
Backtest Performance (20-stock avg, 3yr)
29.4% Strategy Return
63.3% Buy & Hold
-33.9% Alpha
41% Win Rate
2.73 Sharpe Ratio
-21.6% Max Drawdown
Entry Rules
  • Long: SuperTrend(3,1.0) flips from bearish to bullish (no RSI filter)
  • Short: SuperTrend flips from bullish to bearish AND RSI > 25 (not oversold)
Stop Loss
  • The Supertrend line itself IS the stop (adaptive trailing)
  • Fallback: 2x ATR below entry
Profit Target
  • Target 2x ATR above entry (tighter target captures gains consistently)
  • Or hold until the Supertrend flips
Exit Rules
  • Exit when the Supertrend flips direction (opposite flip)
Key Indicators
Supertrend(3,1.0) RSI(14) ATR(3)
Example Trade
AAPL
Setup
AAPL's Supertrend was bearish (above price) at $182. Price was dropping from $190.
Entry
Entered long at $186 when price crossed above the Supertrend line, flipping it to bullish.
Stop
The Supertrend line at $182 was the automatic stop.
Target
No fixed target — hold until Supertrend flips.
Outcome
Rode the trend from $186 to $198. Supertrend flipped bearish at $195. Exited for a 4.8% gain. The indicator handled all the stop management automatically.
Supertrend indicator
Triple EMA Crossover (10/25/60)
Three-EMA system with volume confirmation for trend entry timing.
Trend Following Long & Short Intermediate
Win 37%
PF 1.5
Sharpe 1.5
Trades 225
Return 17% vs 61% B&H
Click for entry, stop, target & example
Why It Works
Using three EMAs (fast, medium, slow) filters out noise better than a simple dual crossover. All three must align for entry — this triple confirmation plus volume reduces false signals and ensures you're trading with the dominant trend at multiple timeframes.
Uses three EMAs at 10, 25, and 60 periods. When all three are aligned (10 > 25 > 60) with above-average volume, the trend is confirmed. Enter on the first bar the full bullish stack establishes. More reliable than dual-EMA systems because it filters out weak trends with triple confirmation plus volume.
Best in strongly trending markets where all three timeframes align. The triple filter keeps you out during choppy transitions between trends.
Backtest Performance (20-stock avg, 3yr)
16.9% Strategy Return
61.3% Buy & Hold
-44.4% Alpha
37% Win Rate
1.49 Sharpe Ratio
-22.6% Max Drawdown
Entry Rules
  • All three EMAs are aligned: 10 > 25 > 60 for longs (reverse for shorts)
  • Volume must be above its 10-period SMA (volume filter)
  • Enter on the first bar the full alignment is established
Stop Loss
  • Place stop at close - 4x ATR
  • 4x ATR distance reduces whipsaw stops
Profit Target
  • No fixed target — ride until alignment breaks
  • 3.5x ATR take profit
Exit Rules
  • Exit when EMA(10) crosses below EMA(25) or EMA(25) crosses below EMA(60)
Key Indicators
EMA(10) EMA(25) EMA(60) Volume ATR(14)
Example Trade
COST
Setup
COST had all three EMAs aligned (10 > 25 > 60) for a month with strong volume. Price pulled back 3% to touch the 10 EMA.
Entry
Entered at $725 on the bounce from the 10 EMA with above-average volume.
Stop
Stop at close - 4x ATR.
Target
Trail stop at the 25 EMA, no fixed target.
Outcome
COST continued trending to $760 over 5 weeks. Exited at $752 when the 10 EMA dipped toward the 25 EMA.
Triple moving average system
Weinstein Stage 2
Ride Stage 2 advances using 3 sub-types: breakout, pullback, and momentum.
Trend Following Long Intermediate
Win 43%
PF inf
Sharpe 3.5
Trades 174
Return 107% vs 164% B&H
Click for entry, stop, target & example
Why It Works
Stan Weinstein's framework identifies stocks in the 'markup' phase of their cycle. The momentum sub-type (+61.7% avg in backtests) uses SMA100 instead of SMA150 to catch trends earlier, with multi-MA alignment as the key filter.
Stan Weinstein's Stage Analysis with 3 sub-types. Momentum (best performer): MA alignment (SMA50 > SMA100, both rising) + 20d high breakout + RSI. Pullback: re-entry during established Stage 2 when price dips to short MA. Breakout: Stage 1→2 transition with flat base detection + resistance breakout + 2x volume.
Works best in bull markets where institutional money is rotating into new leadership. The SMA slope filter naturally keeps you out during bear markets. Momentum sub-type is the strongest performer.
Backtest Performance (20-stock avg, 3yr)
107.1% Strategy Return
164.4% Buy & Hold
-57.4% Alpha
43% Win Rate
3.46 Sharpe Ratio
-23.6% Max Drawdown
Entry Rules
  • Momentum: price > SMA50 > SMA100, both rising, breakout above 20-day high, RSI 50-80
  • Pullback: established Stage 2 + price dips to SMA50 then recovers + RSI > 40
  • Breakout: Stage 1 flat base detected + SMA turns up + high volume + resistance break
Stop Loss
  • Momentum: stop below SMA50 - 2*ATR
  • Breakout/Pullback: stop below SMA100 - 2*ATR
Profit Target
  • Initial planning target at 10x ATR above entry — Stage 2 trends deliver 30-100%+ so trail via SMA50/SMA100 rather than taking profit early
Exit Rules
  • SMA50 crosses below SMA100 (Stage 2 ending)
  • SMA100 slope turns negative
  • 2 consecutive closes below short MA on expanding volume (breakout type)
Key Indicators
SMA(50) SMA(100) SMA Slope RSI Volume 20-Day High
Example Trade
AVGO
Setup
AVGO had been basing between $120-$140 for 4 months (Stage 1). The 150-day SMA flattened and began to rise. RS vs SPY turned positive.
Entry
Entered at $145 when price broke above the Stage 1 base on 2x volume with the 150 SMA rising.
Stop
Stop at $132 — just below the 150-day SMA.
Target
No fixed target — ride the Stage 2 uptrend.
Outcome
AVGO ran from $145 to $240 over 8 months as AI chip demand surged. The Stage 2 identification caught the trend early. Exit came when the 150 SMA finally flattened at $235.
Stan Weinstein — Secrets for Profiting in Bull and Bear Markets
Donchian Channel Breakout
Buy 20-day high breakouts, exit at 10-day low.
Breakout Long & Short Beginner
Click for entry, stop, target & example
Why It Works
Richard Donchian's channel breakout is the grandfather of all trend-following systems. Buy when price breaks the upper channel — it's the purest expression of 'buy high, sell higher' and captures the beginning of new trends.
Richard Donchian's channel breakout system. Buy when price breaks above the 20-day high, exit when it breaks below the 10-day low. One of the oldest and simplest trend-following systems — the foundation of Turtle Trading.
Thrives in markets transitioning from low to high volatility. The Donchian Channel naturally adapts to the lookback period, capturing breakouts from consolidation ranges.
Entry Rules
  • Long: price closes above the 10-day high (Donchian upper channel)
  • Short: price closes below the 10-day low (Donchian lower channel)
Stop Loss
  • Place stop 5x ATR below entry (wide stop to let trend develop)
Profit Target
  • Initial target at 2x ATR above entry — trail exit via the 10-day lower channel for trend-following positions
Exit Rules
  • Exit longs when price crosses below the 10-day lower channel
  • Exit shorts when price crosses above the 10-day upper channel
Key Indicators
Donchian Channel(10) ATR(14)
Example Trade
GLD
Setup
Gold (GLD) had been ranging for 3 weeks between $185-$192. The 20-day high was $192.
Entry
Entered long at $193 when price closed above the 20-day high.
Stop
Stop at $183 — 5x ATR below entry (wide stop to let the trend develop).
Target
Initial target at $197 — 2x ATR above entry; actual exit trails via the 10-day low channel.
Outcome
GLD trended to $205 over 4 weeks as gold broke out. The trailing 10-day low exit eventually triggered at $201, locking in a 4.1% gain.
Richard Donchian — Donchian Channels
Qullamaggie Breakout
Buy momentum stocks breaking out of tight ranges near 52-week highs.
Breakout Long Advanced
Win 38%
PF 1.3
Sharpe -0.1
Trades 322
Return 15% vs 63% B&H
Click for entry, stop, target & example
Why It Works
Inspired by Kristjan Qullamaggie's approach — buy stocks consolidating near 52-week highs after a strong quarterly run. The tight consolidation near highs means sellers have been absorbed and a breakout will have minimal overhead resistance.
Kristjan Qullamaggie's breakout method. Targets stocks that have run up significantly (quarter up) and are consolidating near their highs above key moving averages. The tighter the consolidation near the high, the more explosive the breakout.
Thrives in momentum-driven bull markets with clear sector leaders. Most effective when the broad market is trending up and high-beta stocks are outperforming.
Backtest Performance (20-stock avg, 3yr)
15.1% Strategy Return
63.3% Buy & Hold
-48.3% Alpha
38% Win Rate
-0.15 Sharpe Ratio
-18.3% Max Drawdown
Entry Rules
  • Supertrend(10, 3.0) must be bullish (price above Supertrend line)
  • EMA(5) above EMA(10) (fast/slow EMA alignment)
  • Price breaks above the 5-bar consolidation high (crossover breakout)
Stop Loss
  • Place stop 3x ATR(7) below entry (frozen at entry bar)
  • Shorter ATR(7) makes stops more responsive to recent volatility
Profit Target
  • Target 4x ATR(7) above entry
  • Wide target — momentum play, let winners run
Exit Rules
  • Exit when Supertrend flips bearish (direction = -1)
  • OR close crosses below the 10 EMA (slow EMA)
Key Indicators
EMA(5) EMA(10) Supertrend(10,3.0) ATR(7) 5-bar High
Example Trade
CRWD
Setup
CRWD was up 45% over 3 months and consolidating in a 5% range between $340-$358 for 2 weeks. Price stayed above both the 20 and 50 SMA.
Entry
Entered at $360 when price broke above $358 resistance on 1.7x average volume.
Stop
Stop at $340 — the low of the 2-week consolidation range.
Target
Initial target at $400 — 2x the stop distance ($20) above entry.
Outcome
CRWD broke out to $410 in 10 days. The tight consolidation near highs signaled institutional accumulation was complete, and the volume breakout confirmed it.
Kristjan Qullamaggie
Turtle Breakout
Buy new 20-day highs with strong volume and trend confirmation.
Breakout Long Beginner
Win 37%
PF 1.2
Sharpe 0.8
Trades 916
Return 31% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Big trends start with breakouts. The original Turtle Traders proved that systematically buying new highs and riding them with a trailing stop captures outsized moves, even with a modest win rate.
Based on the legendary Turtle Traders system. Enter when price breaks to a new 20-day high on above-average volume. The simplicity is the point — catch big trends early and ride them with a trailing stop.
Thrives when markets are transitioning from consolidation to trend. Best in expanding volatility environments where breakouts follow through.
Backtest Performance (20-stock avg, 3yr)
30.9% Strategy Return
162.7% Buy & Hold
-131.7% Alpha
37% Win Rate
0.80 Sharpe Ratio
-34.8% Max Drawdown
Entry Rules
  • Price makes a new 20-day high
  • Volume is above 500K (liquid stock)
  • Stock is mid-cap or larger ($10+)
Stop Loss
  • Place stop 2x ATR(14) below entry
  • Classic Turtles used 2N stop (N = ATR)
Profit Target
  • No fixed target — use a trailing stop to ride the trend
  • Trail stop at 3x ATR below the highest close since entry
Exit Rules
  • Trailing stop hit
  • Price makes a new 10-day low (classic Turtle exit)
Key Indicators
20-day High ATR(14) Volume
Example Trade
SMCI
Setup
SMCI had been basing for 2 weeks near $800. Volume was contracting, coiling for a move.
Entry
Entered at $815 when price broke to a new 20-day high on 2x average volume.
Stop
Stop at $789 — 2x ATR ($13) below entry.
Target
No fixed target. Trailed stop at 3x ATR below highest close.
Outcome
SMCI ran to $920 over the next 3 weeks as AI infrastructure spending accelerated. The trailing stop eventually triggered at $875, locking in a 7.4% gain.
Richard Dennis — Turtle Trading System
VCP (Volatility Contraction)
Buy stocks with progressively tighter price contractions near highs.
Breakout Long Advanced
Win 40%
PF inf
Sharpe 0.5
Trades 66
Return 7% vs 88% B&H
Click for entry, stop, target & example
Why It Works
Volatility contraction is the market's way of digesting gains before the next move. Each tighter consolidation reduces the supply of sellers, so when the breakout comes, there's less resistance overhead.
Mark Minervini's Volatility Contraction Pattern. Stocks that have run up strongly form a series of progressively tighter corrections (e.g., 20% → 12% → 6%). Each contraction shows sellers drying up. Buy the breakout from the final tight area.
Works best in healthy bull markets where leading stocks consolidate near highs rather than rolling over. Avoid in declining markets where contractions resolve to the downside.
Backtest Performance (19-stock avg, 3yr)
7.4% Strategy Return
88.1% Buy & Hold
-80.8% Alpha
40% Win Rate
0.47 Sharpe Ratio
-7.1% Max Drawdown
Entry Rules
  • ATR is in the bottom 25th percentile over 100 bars (volatility contraction)
  • Price is within 5% of its 52-week high
  • Price is above EMA(50) — Stage 2 uptrend
  • Buy when price breaks above the Keltner Channel upper band
Stop Loss
  • Place stop 2x ATR below entry (frozen at entry bar)
  • Typically 5-8% below the breakout point
Profit Target
  • Target 3x ATR above entry
  • Use measured move: depth of the base added to the breakout level
Exit Rules
  • Exit if price drops below EMA(50)
Key Indicators
52-week High proximity ATR percentile rank Keltner Channels EMA(50)
Example Trade
PLTR
Setup
PLTR had rallied from $18 to $25, then formed 3 contractions: -15%, -9%, -5%. The base tightened over 6 weeks near $24.50.
Entry
Entered at $25.10 when price broke above the $25 pivot on volume 1.8x the 50-day average.
Stop
Stop at $23.70 — just below the low of the final 5% contraction.
Target
Target at $29 — measured move (depth of base) added to breakout.
Outcome
PLTR broke out cleanly and reached $29.50 in 2 weeks as government contract news provided a catalyst. The VCP setup had absorbed all selling before the move.
Mark Minervini — Trade Like a Stock Market Wizard
2B Reversal
Buy failed breakdowns — when a new low fails and reverses.
Reversal Long Intermediate
Win 52%
PF inf
Sharpe 5.6
Trades 132
Return 3% vs 61% B&H
Click for entry, stop, target & example
Why It Works
Failed breakdowns are powerful reversal signals. When price makes a new low and immediately reclaims it, trapped shorts scramble to cover, creating a natural bid under the stock.
Victor Sperandeo's 2B pattern. When a stock makes a new low (or new high for shorts) but immediately reverses, it traps sellers who entered on the breakdown. The failed breakdown creates a springboard for a sharp reversal.
Most reliable after extended declines when sellers are exhausted. Works well at obvious support levels and during market-wide washouts.
Backtest Performance (20-stock avg, 3yr)
2.8% Strategy Return
61.3% Buy & Hold
-58.5% Alpha
52% Win Rate
5.56 Sharpe Ratio
-6.8% Max Drawdown
Entry Rules
  • Stock breaks to a new 3-bar low (pivot), then reverses and closes back above
  • RSI(10) < 40 confirms oversold on entry bar
  • ADX(14) > 20 ensures directional trend context
Stop Loss
  • Stop below yesterday's low minus 2.5x ATR(14)
  • Frozen at entry bar to prevent drifting
Profit Target
  • Target at entry + 6x ATR(14)
  • Asymmetric reward — wide target lets winners run
Exit Rules
  • RSI(10) crosses above 55 (quick profit-taking)
  • Close drops below EMA(25)
Key Indicators
RSI(10) ADX(14) EMA(25) ATR(14) Pivot low (3-bar)
Example Trade
AMD
Setup
AMD had support at $110 for 6 weeks. On a market-wide selloff, it broke down to $107 but volume dried up — sellers were exhausted.
Entry
Entered at $111 when AMD closed back above the $110 support the very next day.
Stop
Stop at $106.50 — just below the failed breakdown low of $107.
Target
Target at $122 — the top of the prior range.
Outcome
AMD rallied to $124 in 2 weeks as the failed breakdown trapped shorts who covered. The tight stop gave a 2.9:1 R:R on the trade.
Victor Sperandeo — Trader Vic's Methods
Reversal at Support
Buy at key support levels when price shows rejection.
Reversal Long Intermediate
Win 52%
PF inf
Sharpe 0.9
Trades 156
Return 0% vs 165% B&H
Click for entry, stop, target & example
Why It Works
Support levels represent zones where buyers have previously stepped in. When price returns to a proven support level and shows reversal signals, the risk-reward is attractive — your stop is just below support and the upside is the prior trading range.
Identify stocks at major support levels (prior lows, round numbers, moving averages) and buy when price shows rejection: hammer candles, bullish engulfing, or volume drying up at support. The support level defines your risk.
Works best in range-bound markets where support levels are well-defined and tested. Less effective when support is breaking down across the broader market.
Backtest Performance (20-stock avg, 3yr)
0.1% Strategy Return
164.8% Buy & Hold
-164.6% Alpha
52% Win Rate
0.91 Sharpe Ratio
-18.3% Max Drawdown
Entry Rules
  • RSI(14) < 40 — oversold zone (widened from 30 for better coverage, 8/8 profitable)
  • Bullish engulfing candlestick pattern forms (today's body engulfs yesterday's bearish body)
  • Yesterday was a bearish candle (close < open)
Stop Loss
  • Place stop 1.5x ATR below the low
  • If support breaks, the thesis is wrong
Profit Target
  • Target 3x ATR above entry
  • Minimum 2:1 R:R from the tight stop
Exit Rules
  • Exit when RSI recovers above 75 (raised from 65 to let winners run)
  • Exit if support breaks on a closing basis
Key Indicators
Support levels Candlestick patterns Volume RSI
Example Trade
BA
Setup
BA tested the $180 level for the 3rd time in 2 months. Each prior test had bounced $15+. Volume was declining on the approach — sellers exhausted.
Entry
Entered at $182 after a hammer candle formed right at $180 support.
Stop
Stop at $177 — just below the support level.
Target
Target at $200 — the prior swing high from the last bounce.
Outcome
BA bounced from $180 to $198 in 2 weeks, respecting the support for the 3rd time. The declining volume on approach correctly signaled sellers were done.
Support/resistance reversal trading
San Ku (Three Gaps)
Catch oversold bounces after 3+ consecutive gap-downs in extreme panic.
Reversal Long Intermediate
Win 61%
PF inf
Sharpe 5.0
Trades 56
Return -0% vs 61% B&H
Click for entry, stop, target & example
Why It Works
Three consecutive gaps down represent panic selling and exhaustion. The crowd is capitulating, and when combined with deeply oversold readings, the probability of a snap-back rally increases sharply.
A Japanese candlestick reversal pattern. After 3 or more consecutive gap-down openings with RSI(2) below 10, selling is exhausted and a bounce is likely. Stricter entry filters (deeper oversold, more gaps) produce higher quality trades.
Most effective during broad market corrections or sector-specific sell-offs where quality stocks get thrown out with the bathwater. Avoid during genuine bear markets where stocks can keep falling.
Backtest Performance (20-stock avg, 3yr)
-0.4% Strategy Return
61.3% Buy & Hold
-61.8% Alpha
61% Win Rate
5.00 Sharpe Ratio
-5.9% Max Drawdown
Entry Rules
  • 3+ consecutive gap-down openings in the last 5 days
  • RSI(2) is below 10 — extreme panic oversold
  • Price is above SMA(100) — only trade reversals in longer-term uptrends
  • Enter when the stock prints a green candle after the gaps
Stop Loss
  • Place stop below the lowest low of the gap sequence
  • Typically 2x ATR below entry
Profit Target
  • Target the fill of the most recent gap (gap-fill level)
  • Or target 3x ATR above entry for a standard R:R
Exit Rules
  • Exit after 3-5 days — this is a short-term mean reversion play
  • Exit if RSI(2) rises above 65 (overbought bounce complete)
Key Indicators
RSI(2) Gap sequence ATR(14) SMA(100)
Example Trade
TSLA
Setup
TSLA gapped down 3 days in a row after an earnings miss, falling from $260 to $228. RSI(2) hit 8.
Entry
Entered at $231 when TSLA printed a hammer candle on the 4th day — first green close.
Stop
Stop at $222 — below the 3-day gap sequence low.
Target
Target at $248 — filling the first gap-down from $260.
Outcome
TSLA bounced to $250 in 3 trading days as bargain hunters stepped in. The RSI(2) shot back to 75, signaling exit. Quick 8.2% gain.
Japanese Candlestick Charting — Steve Nison
VIX Reversal
Buy the market when VIX spikes signal fear exhaustion.
Reversal Long Intermediate
Win 59%
PF 1.6
Sharpe 2.6
Trades 1373
Return 69% vs 163% B&H
Click for entry, stop, target & example
Why It Works
The VIX tends to mean-revert after spikes. When fear peaks and volatility reaches extreme levels, equity markets are often near short-term bottoms. Trading this mean-reversion in volatility offers a systematic edge.
When the VIX (fear gauge) spikes to extreme levels and then starts declining, it signals that fear is peaking and the market is likely to bounce. Buy broad market ETFs or oversold stocks when VIX shows a reversal pattern.
Most reliable during sudden fear spikes (geopolitical events, flash crashes) rather than slow-grinding bear markets where elevated VIX can persist.
Backtest Performance (20-stock avg, 3yr)
68.9% Strategy Return
162.7% Buy & Hold
-93.8% Alpha
59% Win Rate
2.60 Sharpe Ratio
-22.7% Max Drawdown
Entry Rules
  • VIX has spiked above 25 (elevated fear) — or ATR spike > 1.5x average (fallback)
  • RSI was recently in panic (< 30 within 3 bars)
  • RSI is now recovering (> 35) — fear subsiding
  • SPY/QQQ are near support or oversold on RSI
Stop Loss
  • Place stop if VIX makes a new high (fear is escalating, not peaking)
  • Or stop 2x ATR below entry on the long position
Profit Target
  • Target when VIX drops back to its 20-day SMA (fear normalized)
  • Or target a 3-5% bounce in SPY/QQQ
Exit Rules
  • Exit when RSI > 65 (overbought recovery)
  • Exit when ATR normalizes below its moving average
  • Exit after 5-7 days — this is a short-term fear-reversal play
Key Indicators
VIX level VIX SMA(20) SPY RSI Put/Call ratio
Example Trade
SPY
Setup
VIX spiked from 14 to 28 on geopolitical fears. SPY dropped 5% to $440. RSI(14) hit 25.
Entry
Entered SPY long at $442 when VIX printed its first red candle (from 28 to 25).
Stop
Stop if VIX closes above 30 — fear escalating beyond peak.
Target
Target SPY at $460 — recovery to pre-spike levels.
Outcome
VIX collapsed back to 18 over 2 weeks. SPY rallied to $462. The VIX spike was fear-driven, not fundamental — exactly when this strategy excels.
VIX mean reversion
Waterfall Decline Recovery
Buy after -5%+ drawdown when EMA fast crosses above slow — recovery confirmed.
Reversal Long Intermediate
Win 34%
PF 1.4
Sharpe 2.0
Trades 648
Return 31% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Waterfall declines create dislocations that snap back. The key insight: -5% drawdown catches far more recoverable pullbacks than the old -20% threshold, which only fired during crash events. EMA crossover confirms the recovery is real.
Drawdown recovery via EMA crossover. When a stock drops -5% or more from its period high and the fast EMA crosses above the slow EMA, the recovery is confirmed. Exit on EMA cross back down or RSI > 75 (overbought). Lower threshold (-5% vs old -20%) catches far more setups — normal pullback recoveries, not just crash recoveries.
Most effective after sharp pullbacks in otherwise trending stocks. The -5% threshold captures normal corrections, while -15% catches deeper sell-offs. EMA(10/30) is more consistent; EMA(5/20) is more aggressive.
Backtest Performance (20-stock avg, 3yr)
30.9% Strategy Return
162.7% Buy & Hold
-131.7% Alpha
34% Win Rate
2.03 Sharpe Ratio
-34.8% Max Drawdown
Entry Rules
  • Stock had -5%+ drawdown from 60-bar period high within last 30 bars
  • EMA(10) crosses above EMA(30) — recovery confirmation
  • Variants: DD thresholds -5%, -8%, -10%, -15% × EMA pairs (5/20), (10/30)
Stop Loss
  • Stop at close - 2× ATR (frozen at entry)
  • Wider stops for deeper drawdown variants
Profit Target
  • Target at close + 4× ATR (frozen at entry)
  • Or exit on EMA cross back or RSI overbought
Exit Rules
  • EMA fast crosses back below slow (recovery failed)
  • RSI > 75 (overbought — take profit on mean reversion)
Key Indicators
EMA(10) EMA(30) RSI(14) ATR(14) Drawdown % Period High
Example Trade
COIN
Setup
COIN dropped 12% from $280 to $247 over 2 weeks. The pullback breached the -5% drawdown threshold.
Entry
Entered at $255 when EMA(10) crossed above EMA(30) — recovery confirmed.
Stop
Stop at $241 — 2× ATR below entry, frozen at entry bar.
Target
Target at $283 — 4× ATR above entry.
Outcome
COIN recovered to $280 in 10 days. The EMA cross correctly identified the turning point after a normal pullback.
Drawdown recovery / waterfall decline pattern
Bottom Picker
Multi-factor oversold composite for catching bottoms.
Mean Reversion Long Intermediate
Win 65%
PF 1.3
Sharpe 1.4
Trades 1178
Return 19% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Combining multiple independent oversold indicators creates a higher-conviction signal than any single metric. When RSI, Bollinger Bands, volume, and consecutive down-day counts all align, the probability of a bounce is significantly elevated.
A 6-indicator composite oversold score that combines RSI(14), RSI(2), Bollinger Band position, consecutive down days, volume ratio, and distance from the 50 SMA. Stocks scoring high on multiple oversold metrics are more likely to bounce.
Best during broad market corrections where fundamentally sound stocks get oversold on indiscriminate selling. Avoid in confirmed bear markets where 'cheap' gets cheaper.
Backtest Performance (20-stock avg, 3yr)
18.9% Strategy Return
162.7% Buy & Hold
-143.7% Alpha
65% Win Rate
1.43 Sharpe Ratio
-38.8% Max Drawdown
Entry Rules
  • RSI(14) < 35 — intermediate-term oversold
  • RSI(2) < 10 — extreme short-term oversold
  • Price is at or below the lower Bollinger Band(20,2)
  • 3+ consecutive down days
  • Volume spike (above 1.5x the 20-day average)
  • Price is 5%+ below the 50 SMA
Stop Loss
  • Place stop below the lowest low of the down sequence
  • Or 2x ATR below entry
Profit Target
  • Target the 20 SMA for a quick mean reversion bounce
  • Target the 50 SMA for a full recovery play
Exit Rules
  • Exit when RSI(14) crosses above 50
  • Exit when price reclaims BB midband
  • Exit when Stochastic %K crosses above 80 (overbought recovery)
Key Indicators
RSI(14) RSI(2) Bollinger Bands(20,2) SMA(50) Volume ratio Stochastic(14,3,3)
Example Trade
MSFT
Setup
MSFT dropped 7 days in a row during a market correction. RSI(14) at 28, RSI(2) at 5, price 6% below the 50 SMA and below the lower Bollinger Band. Volume was 2x normal.
Entry
Entered at $370 — all 6 oversold criteria were triggered simultaneously.
Stop
Stop at $362 — below the 7-day low sequence.
Target
Target at $388 — the 50 SMA (full recovery).
Outcome
MSFT bounced 5% in 4 days back to $388. The multi-factor oversold reading correctly identified capitulation selling.
Multi-factor oversold model
Mean Reversion
Buy oversold stocks expecting a bounce back to the average.
Mean Reversion Long Beginner
Win 64%
PF 1.3
Sharpe 1.4
Trades 611
Return 17% vs 63% B&H
Click for entry, stop, target & example
Why It Works
Stocks oscillate around their fair value. When an oversold signal triggers on a liquid stock, statistical odds favor a bounce — not because the stock is 'cheap' but because short-term selling pressure tends to exhaust itself.
The simplest strategy — buy stocks that have been oversold and wait for them to revert back toward their moving average. Works best in liquid, large-cap stocks that tend to bounce from extremes.
Works best in range-bound or mildly bullish markets where pullbacks are buying opportunities rather than the start of larger declines.
Backtest Performance (20-stock avg, 3yr)
16.6% Strategy Return
63.3% Buy & Hold
-46.7% Alpha
64% Win Rate
1.45 Sharpe Ratio
-20.9% Max Drawdown
Entry Rules
  • Williams %R(2) drops below -80 — extreme short-term oversold
  • Close is above EMA(100) — confirming uptrend (no falling knives)
Stop Loss
  • No hard ATR stop — prev-high exit is sufficient (ATR stops hurt low-vol stocks)
Profit Target
  • Use 3x ATR above entry as the planning target — the exit signal handles actual profit-taking
Exit Rules
  • Exit when close crosses above 2-bar-ago high (stronger bounce confirmation)
  • Typical hold: 1-3 bars — this is a short-term bounce play
Key Indicators
Williams %R(2) EMA(100) High[2] ATR(14)
Example Trade
JPM
Setup
JPM dropped 8% in a week on broad market weakness. RSI(14) fell to 24, and price was $12 below its 20 SMA.
Entry
Entered at $178 with RSI at 24 and price touching the lower Bollinger Band.
Stop
Stop at $173 — 2x ATR ($2.50) below entry.
Target
Target at $186 — the 20-day SMA.
Outcome
JPM bounced back to $187 in 6 days. The drop was market-driven, not fundamental — exactly the type of move that mean reverts reliably.
Classic mean reversion (Williams %R variant)
Williams %R Reversal
Buy when Williams %R crosses up from extreme oversold.
Mean Reversion Long & Short Beginner
Click for entry, stop, target & example
Why It Works
Williams %R measures where the current close falls within the recent high-low range. Extreme readings indicate that buyers or sellers have pushed price to the edge of its recent range, making a reversal more likely.
Williams %R measures overbought/oversold on a scale of 0 to -100. Readings below -80 are oversold, above -20 are overbought. Enter when the indicator crosses back from an extreme, signaling the reversal is beginning.
Best in range-bound or mildly trending markets where overbought/oversold extremes produce reliable reversals. Less effective in strong trends where the indicator stays pegged at extremes.
Entry Rules
  • Long: Williams %R crosses above -80 from below (leaving oversold zone)
  • Short: Williams %R crosses below -20 from above (leaving overbought zone)
Stop Loss
  • Place stop 4x ATR below entry
Profit Target
  • Target at 3x ATR above entry — exit when Williams %R reaches the opposite extreme (-20 for longs, -80 for shorts)
Exit Rules
  • Exit when Williams %R reaches the opposite zone
  • Exit after 5-7 days if no movement
Key Indicators
Williams %R(3) HMA(15) ATR(14)
Example Trade
DIS
Setup
DIS pulled back to $95 with Williams %R at -92 (extreme oversold).
Entry
Entered long at $96 when Williams %R crossed above -80.
Stop
Stop at $90 — 4x ATR below entry.
Target
Target when Williams %R reaches -20.
Outcome
DIS bounced to $105 as Williams %R reached -18. Exited for a 9.4% gain in 8 trading days.
Larry Williams
Inside Day (Enhanced)
Filtered compression breakout — 4 sub-types: trend, NR4, momentum, fakey.
Volatility Long & Short Intermediate
Win 57%
PF 1.6
Sharpe 2.6
Trades 646
Return 47% vs 163% B&H
Click for entry, stop, target & example
Why It Works
An inside day — where the high and low are contained within the prior day's range — signals compression and indecision. Naked breakouts lose money; adding the right filter (trend, compression, momentum, or reversal) turns the pattern profitable.
Enhanced inside day with 4 filtered sub-types. The naked inside day breakout lost money; adding trend, compression, momentum, or false-breakout filters turns it profitable. Sub-types: trend (SMA200+ADX>25+volume), NR4 (Crabel narrowest-range-of-4), momentum (EMA stack+RSI pullback), fakey (false breakout reversal).
Trend sub-type works best in established uptrends. NR4 works when volatility is contracting. Momentum works in strong EMA-stacked trends. Fakey works at key reversal zones.
Backtest Performance (20-stock avg, 3yr)
46.6% Strategy Return
162.7% Buy & Hold
-116.1% Alpha
57% Win Rate
2.56 Sharpe Ratio
-23.1% Max Drawdown
Entry Rules
  • Trend: inside day + price above SMA(200) + ADX>25 + breakout volume > 1.5× avg
  • NR4: inside day + narrowest range of 4 bars + EMA(50) trend + RSI 40-70
  • Momentum: inside day + EMA(10)>EMA(20)>EMA(50) stack + RSI 40-65 pullback
  • Fakey: inside day + false breakout below low + reversal close above mother bar high
Stop Loss
  • All sub-types: stop below mother bar low minus ATR buffer
  • NR4/fakey: tighter stops due to narrow range compression
Profit Target
  • Default: 3× ATR from entry
  • NR4: time exit after 7 bars if target not hit
  • Fakey: time exit after 10 bars
Exit Rules
  • Price hits ATR-based take profit
  • Time exit triggered (NR4: 7 bars, fakey: 10 bars)
  • Stop loss hit
Key Indicators
Inside Day pattern SMA(200) ADX(14) ATR(14) EMA stack RSI(14) Volume
Example Trade
GOOG
Setup
GOOG had a wide-range day ($170-$178), followed by an inside day ($172-$176). ADX was 32 and price above SMA(200) — strong trend conditions.
Entry
Trend sub-type: entered long at $176.50 when price broke above mother bar high with 1.8× average volume.
Stop
Stop at $171.50 — below mother bar low minus 1× ATR buffer.
Target
Target at $185 — 3× ATR above entry.
Outcome
GOOG broke out and reached $185 in 3 days. The trend filter correctly identified a high-probability compression breakout.
Toby Crabel 'Day Trading With Short Term Price Patterns' (NR4), Linda Raschke 'Street Smarts', Nial Fuller (Fakey)
TTM Squeeze
Volatility contraction breakout with ATR trailing exit — lets winners run.
Volatility Long & Short Intermediate
Win 49%
PF inf
Sharpe 3.0
Trades 115
Return 55% vs 163% B&H
Click for entry, stop, target & example
Why It Works
When Bollinger Bands contract inside Keltner Channels, it signals unusually low volatility — like a coiled spring. Volatility is cyclical, so extreme compression typically precedes an explosive directional move.
John Carter's TTM Squeeze detects when Bollinger Bands contract inside Keltner Channels — a sign that volatility is coiling. When the bands expand back outside with positive momentum, enter long. ATR trailing exit lets winners run instead of cutting early on SMA pullbacks.
Best when detected in stocks already in a trend (above key moving averages). The squeeze resolves in the direction of the prevailing trend more often than against it.
Backtest Performance (20-stock avg, 3yr)
55.0% Strategy Return
162.7% Buy & Hold
-107.7% Alpha
49% Win Rate
3.01 Sharpe Ratio
-22.4% Max Drawdown
Entry Rules
  • Bollinger Bands (20,2) are inside Keltner Channels (20,1.5) — squeeze is ON
  • Wait for squeeze to fire (bands expand outside Keltner again)
  • Momentum must be positive (close > SMA20) at squeeze release
Stop Loss
  • Stop at 3x ATR below entry — wider stop avoids premature shakeouts
Profit Target
  • Target at 5x ATR above entry
  • ATR trailing exit (highest high of 10 bars minus 3.5x ATR) captures most gains
Exit Rules
  • ATR trailing stop: exit when close drops below rolling 10-bar high minus 3.5x ATR
  • Trail ratchets up with new highs — never moves down
Key Indicators
Bollinger Bands(20,2) Keltner Channels(20,1.5) SMA(20) ATR(14)
Example Trade
AAPL
Setup
AAPL traded in a tight range for 3 weeks ($185-$190). Bollinger Bands compressed fully inside Keltner Channels — squeeze was ON.
Entry
Entered long at $191 when the squeeze fired and close was above SMA(20).
Stop
Stop at $183 — 3x ATR below entry.
Target
Target at $204 — 5x ATR above entry. ATR trail as primary exit.
Outcome
AAPL broke out and trended to $205 over 2 weeks. The ATR trailing stop locked in gains at $199 when the rally paused — far better than the old SMA exit at $193.
John Carter — Mastering the Trade
VIX Pivot Bands
Buy equities when VIX fear spikes reverse from 2σ upper band.
Volatility Long & Short Intermediate
Click for entry, stop, target & example
Why It Works
VIX mean-reverts strongly. Extreme deviations from the rolling mean create high-probability reversal setups. The ±Nσ bands quantify when fear or complacency has gone too far.
Uses rolling mean ± N standard deviation bands on VIX close. When VIX spikes above the upper band and reverses back below, fear has peaked — go long equity. When VIX drops below the lower band and bounces back above, complacency has peaked — go short equity.
Best when VIX is actively cycling with clear spikes and drops. Tighter bands (1σ) generate more signals; wider bands (2σ) are more selective.
Entry Rules
  • Long: VIX was above upper band (2σ) recently and now crosses back below it
  • 2σ bands filter for only extreme VIX spikes — higher quality entries
  • Long-only — short equity signals removed (underperform in production)
Stop Loss
  • Place stop 2-3x ATR(14) below entry on the equity
  • Stop is frozen at entry bar — doesn't float with VIX bands
Profit Target
  • Target is 1.5× the stop distance above entry
  • Or hold until VIX crosses back to the rolling mean
Exit Rules
  • Long exit: VIX crosses above the rolling mean (back to neutral)
  • Short exit: VIX crosses below the rolling mean
Key Indicators
VIX Rolling Mean VIX Bollinger-style Bands (±Nσ) Equity RSI(14) ATR(14)
Example Trade
QQQ
Setup
VIX spiked to 28, well above the 1σ upper band (24.5). Rolling mean was 19.
Entry
VIX reversed and crossed back below 24.5. Entered QQQ long at $440.
Stop
Stop at $432 — entry minus 2x ATR($4).
Target
Target at $452 — entry plus 3x ATR.
Outcome
VIX continued mean-reverting to 20. QQQ rallied to $455 over 5 days.
VIX mean-reversion band analysis
VIX Pivot Daily
Trade equities using daily VIX S2 pivot level crossovers (long only).
Volatility Long & Short Intermediate
Win 50%
PF 1.1
Sharpe 0.7
Trades 1637
Return 16% vs 163% B&H
Click for entry, stop, target & example
Why It Works
VIX mean-reverts. Daily pivot levels on VIX act as reliable fear/complacency boundaries. When VIX hits a support level and reverses, the fear premium is being unwound — equity prices rise.
Uses daily VIX S2 pivot level as equity long entry trigger. VIX is inversely correlated with equities: when VIX crosses below the S2 support level, extreme fear is declining and equities rally. S2 entries are rarer but higher quality than S1.
Works across all market regimes because VIX pivot levels adapt to current volatility. Best when VIX is actively cycling between support and resistance (not stuck in one zone).
Backtest Performance (20-stock avg, 3yr)
15.6% Strategy Return
162.7% Buy & Hold
-147.1% Alpha
50% Win Rate
0.68 Sharpe Ratio
-37.6% Max Drawdown
Entry Rules
  • Long: VIX crosses below daily S2 (extreme fear declining → buy equity)
  • S2/R2 levels only — more extreme = fewer but higher quality entries
Stop Loss
  • Place stop 3.0x ATR(14) below entry on the equity (not VIX)
  • Stop is frozen at entry bar — doesn't float with VIX levels
Profit Target
  • Target is 1.5× the stop distance above entry (reward-to-risk ratio)
  • Or hold until VIX crosses back to pivot point (PP)
Exit Rules
  • Long exit: VIX crosses above PP (fear returning to neutral)
  • Short exit: VIX crosses below PP (fear subsiding)
Key Indicators
VIX Pivot Points (PP, S1-S3, R1-R3) Equity RSI(14) ATR(14)
Example Trade
SPY
Setup
VIX was at 18.5, between daily S1 (17.8) and PP (19.2).
Entry
VIX crossed below S1 (17.8), triggering a long equity signal. Entered SPY at $520.
Stop
Stop at $512 — SPY entry minus 2x ATR($4).
Target
Target at $532 — SPY entry plus 3x ATR.
Outcome
VIX continued lower to 16.5 as complacency set in. SPY rallied to $535 over 8 days. Exited when VIX crossed back above PP (19.2).
VIX mean-reversion and pivot level analysis
VIX Pivot Weekly
Weekly VIX PP as macro regime filter with daily pivot timing.
Volatility Long & Short Intermediate
Win 48%
PF 1.6
Sharpe 2.6
Trades 1282
Return 85% vs 163% B&H
Click for entry, stop, target & example
Why It Works
The weekly VIX PP acts as a macro sentiment gauge — above it means sustained fear, below means sustained complacency. By only taking daily pivot signals aligned with the weekly regime, you filter out counter-trend noise and catch the highest-probability setups.
Combines weekly VIX pivot point as a macro regime filter with daily pivot timing. VIX below weekly PP = bullish macro regime (favor longs); VIX above weekly PP = bearish (favor shorts). Daily S1/R1 crossovers provide precise entry timing within the regime.
Strongest when VIX has clear weekly regime trends. The 84% win rate on L+S variants reflects the power of dual-timeframe confirmation.
Backtest Performance (20-stock avg, 3yr)
84.8% Strategy Return
162.7% Buy & Hold
-77.9% Alpha
48% Win Rate
2.57 Sharpe Ratio
-32.7% Max Drawdown
Entry Rules
  • Long: VIX below weekly PP (bullish regime) + daily VIX crosses below S1/S2
  • Short: VIX above weekly PP (bearish regime) + daily VIX crosses above R1/R2
  • Dual-timeframe confirmation reduces false signals
Stop Loss
  • Place stop 2-3x ATR(14) below entry on the equity
  • Stop is frozen at entry bar
Profit Target
  • Target is 1.5× the stop distance above entry
Exit Rules
  • Long exit: VIX crosses above weekly PP (regime shift to bearish)
  • Short exit: VIX crosses below weekly PP (regime shift to bullish)
Key Indicators
Weekly VIX PP Daily VIX Pivot Points Equity RSI(14) ATR(14)
Example Trade
SPY
Setup
VIX at 18.5 — below weekly PP (20.5) = bullish regime. Daily S1 was at 17.8.
Entry
VIX crossed below daily S1 (17.8) while in bullish weekly regime. Entered SPY at $520.
Stop
Stop at $512 — SPY entry minus 2x ATR($4).
Target
Target at $532 — SPY entry plus 3x ATR.
Outcome
SPY rallied to $535 over 8 days. Exited when VIX crossed above weekly PP (20.5), signaling regime shift.
Multi-timeframe VIX pivot analysis
Bearish (Distribution to Downtrend)
Short stocks showing distribution patterns and trend breakdowns.
Short / Bearish Short Advanced
Win 39%
PF inf
Sharpe -0.0
Trades 26
Return 2% vs 32% B&H
Click for entry, stop, target & example
Why It Works
Regime-aware short selling: SMA(200) and ADX filters prevent shorting in shallow pullbacks during bull markets. SPY regime variants add market-wide bear confirmation. 8 variants: 4 stock-only + 4 with SPY filter. Designed to minimize losses in bull markets while capturing genuine downtrends.
Short stocks transitioning from distribution (Stage 3) to confirmed downtrend (Stage 4). Look for stocks breaking below key support with increasing volume, failing rallies, and negative relative strength vs the market.
Most effective in bear markets or during sector rotation out of formerly leading groups. SPY-regime variants (V4-V7) only fire in market-wide downturns. Stock-only variants (V0-V3) catch individual breakdowns even in bull markets.
Backtest Performance (14-stock avg, 3yr)
2.4% Strategy Return
32.3% Buy & Hold
-29.9% Alpha
39% Win Rate
-0.01 Sharpe Ratio
-7.6% Max Drawdown
Entry Rules
  • Stock below both SMA(50) AND SMA(200) — confirmed deep downtrend
  • ADX > 20 (or 25 for tight variant) — confirms trending, not choppy
  • RSI bounced above threshold in lookback window then faded (bear flag)
  • Price crosses under fast EMA (breakdown continuation)
  • Optional: SPY below SMA(200) for market-wide bear regime confirmation (V4-V7)
Stop Loss
  • Place stop ATR-multiple above entry (2-3x ATR)
  • Frozen at entry bar — does not drift
Profit Target
  • Target ATR-multiple below entry (3-4x ATR)
  • Asymmetric R:R favoring winners
Exit Rules
  • Cover if price crosses back above the 50 SMA
  • Cover when RSI crosses into oversold (mean reversion)
Key Indicators
SMA(50) SMA(200) ADX(14) RSI(14) EMA(10) ATR(14) SPY regime
Example Trade
PYPL
Setup
PYPL broke below its 200 SMA and the 50 SMA was falling. It rallied 5% to test the 50 SMA from below and got rejected.
Entry
Shorted at $62 when the relief rally failed at the declining 50 SMA.
Stop
Stop at $66 — above the failed rally high.
Target
Target at $52 — prior support from 2 years ago.
Outcome
PYPL continued lower to $50 as growth concerns persisted. The failed rally at the 50 SMA was the textbook short entry. Covered at $54 for a 12.9% gain on the short.
Weinstein Stage 4 short selling + regime-aware filtering
Parabolic Short
Short overextended stocks that have gone parabolic.
Short / Bearish Short Advanced
Win 23%
PF 0.7
Sharpe -2.5
Trades 583
Return -16% vs 163% B&H
Click for entry, stop, target & example
Why It Works
Parabolic moves are unsustainable by definition — they require accelerating buying to maintain, and when buying dries up, the decline is often equally sharp. Identifying overextended stocks at the tail end of their run offers asymmetric short opportunities.
Targets stocks that have run up parabolically (most volatile, month up, well above the 20 SMA) and are due for a sharp correction. Parabolic moves always end — the question is timing the reversal. Use this with extreme discipline.
Most effective in frothy market conditions where speculation drives extreme moves. Timing is critical — entering too early against momentum can be costly.
Backtest Performance (20-stock avg, 3yr)
-15.7% Strategy Return
162.7% Buy & Hold
-178.3% Alpha
23% Win Rate
-2.55 Sharpe Ratio
-27.1% Max Drawdown
Entry Rules
  • Stock is among the most volatile (top movers)
  • Stock is up significantly over the past month (parabolic)
  • Price is well above the 20 SMA (overextended)
  • Enter short on the first strong red day after a blow-off top
Stop Loss
  • Place stop above the highest high (the blow-off top)
  • This stop can be wide — parabolic shorts need room
Profit Target
  • Target the 20 SMA (first level of mean reversion)
  • Or target a 50% retracement of the parabolic move
Exit Rules
  • Exit if the stock makes a new high (parabolic move continues)
  • Cover on any gap-down open > 5% — take the gift
Key Indicators
Volatility rank Distance from SMA(20) Volume climax RSI extreme
Example Trade
GME
Setup
GME had run from $20 to $65 in 10 days on meme-stock frenzy. It was 85% above the 20 SMA with RSI at 92.
Entry
Shorted at $58 on a bearish engulfing candle with 3x average volume — the blow-off top reversal.
Stop
Stop at $68 — above the highest high ($65 + buffer).
Target
Target at $40 — the 20 SMA and 50% retracement.
Outcome
GME dropped to $38 in 5 days as the frenzy faded. The blow-off top candle and extreme RSI correctly signaled exhaustion. Covered at $42 for 27% gain on the short.
Parabolic short selling
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