ETH Momentum Breakout Strategy

Core philosophy

Most breakout strategies enter too early — on the first tick outside a range — and get shaken out immediately. This strategy requires all six conditions to align before entering, filtering out noise and ensuring only high-probability setups trigger.

Entry conditions

1. 1. Volatility squeeze (TMM Squeeze)
   Bollinger Bands (20-period, 2× StdDev) compress inside Keltner Channels (20-period, 1.5× ATR). The squeeze must last at least 3 bars. The breakout must follow within 6 bars of squeeze release — stale breakouts are ignored.
2. 2. Breakout confirmation
   Price breaks above the upper BB + 0.3× ATR margin for longs (below lower BB − margin for shorts). The candle body must be ≥40% of the bar range — wicks do not count.
3. 3. Momentum confirmation
   A linear regression of price deviation from the 12-period SMA must be positive and accelerating. Confirms the breakout has directional force, not just a spike.
4. 4. Volume spike
   Volume must exceed 1.8× its 20-period SMA. Filters out low-volume false breakouts where institutional participation is absent.
5. 5. RSI filter
   RSI(14) must be below 75 for longs and above 25 for shorts — prevents chasing entries at overbought or oversold extremes.
6. 6. Daily regime filter
   Price must be within 35% of the 200-EMA on the daily chart (blocks parabolic tops and crashes), and ATR must be between 0.3× and 1.5× its 100-period average (blocks dead markets and panic sessions).

After each exit, a 12-bar cooldown prevents re-entry too soon — eliminating revenge trading.

Adaptive regime

At entry, the strategy classifies the current market into one of three regimes and locks that classification for the duration of the trade:

The same entry signal gets aggressive management in trending conditions and defensive management in choppy ones — without any manual intervention.

Exit mechanisms

Five independent exits work in parallel — whichever triggers first closes the trade:

• Take Profit (TP2) — 3.5× ATR from entry (4.7× in HOT regime, 2.6× in COLD).
• ATR Trailing Stop — 2.5× ATR trailing (regime-scaled). Only moves in the favourable direction.
• Breakeven Stop — After a 1.2× ATR favourable move, stop shifts to entry + 0.2× ATR. The trade becomes risk-free.
• Stagnation Exit — If the trade hasn't moved 0.5× ATR after the regime-dependent bar count (HOT: 15, NORMAL: 10, COLD: 7), it is cut. Historically these trades have an 8% win rate and rarely recover.
• Timeout — Hard 100-bar safety net (~8 days on 2H). Prevents capital being locked in stuck positions indefinitely.

Suggested settings by timeframe

For smaller-cap tokens, increase Vol Spike to 2.0–2.5× and tighten Max Vol Ratio to 1.2–1.3×. For SOL and higher-volatility assets, consider a wider SL (2.5× ATR).

Optional modules

• Partial Take-Profit — Exit a portion at TP1 (1.5× ATR), let the rest ride. Reduces variance but caps big winners.
• Runner Mode — After partial TP, removes the TP2 ceiling and rides the trailing stop indefinitely. Requires Partial TP enabled.
• HTF Trend Filter — Requires price above/below a higher-timeframe EMA with slope. Adds one more layer of trend confirmation.
• Crypto Fundamentals (IntoTheBlock) — Filters entries using on-chain data: active addresses, large transaction count, sentiment.
• Session Filter — Restrict trading to specific hours.

All optional modules are off by default. Start with defaults, verify on demo, then adjust.