Description
The Four-Day Breakout LE strategy is designed by Ken Calhoun.
The strategy adds a buy to open order if:
1. Close price is greater than its simple moving average.
2. The last four candles are all bullish.
3. Price rises by at least $0.50 above the high of the highest of these candles.
The strategy is thus based on the assumption that when such a pattern appears on the chart, the pressure is on the buyers' side and the trend is likely to continue. Moving average length, the minimum number of candles in the pattern, and the minimum buy stop offset can all be customized in the input parameters.
Input Parameters
| Parameter | Description |
|---|---|
average length
|
The length with which the moving average is to be calculated. |
pattern length
|
The minimum number of candles in the pattern. |
breakout amount
|
The minimum price change after the pattern for the strategy to trigger. |
Further reading
1. "Swing Trading Four-Day Breakouts" by Ken Calhoun. Technical Analysis of Stocks & Commodities, October 2017.
Backtesting is the evaluation of a particular trading strategy using historical data. Results presented are hypothetical, and there is no guarantee that the same strategy implemented today would produce similar results.
Technical analysis is not recommended as a sole means of investment research.
For educational purposes only. Not a recommendation of a specific security or investment strategy.