Breakout Strategy Guide
The max-gain playbook maps every breakout signal onto a (lifecycle stage × probability grade) cell, then hands you a concrete action: watch, pilot, full entry, add, trail, take profit, or avoid. The matrix below is the source of truth for how the engine sizes, stops, and exits each setup.
Lifecycle stages
- near starting — Early-stage accumulation — base is shallow, pattern has not formed yet.
- just started — Pattern has begun forming; structural highs / lows are becoming visible.
- approaching — Pattern matured; price is consolidating just beneath the trigger level.
- breaking — Breakout bar is printing — the entry window is open right now.
- near completing — Trade is maturing; price approaching target1 or post-breakout exhaustion.
Probability grades
- A — top decile historical hit-rate for this (pattern × regime).
- B — above-average edge; take full size but trim slightly.
- C — average or below; pilot only, add on confirmation.
- D — poor historical edge; avoid committing capital.
20-cell playbook matrix
| Stage ↓ / Grade → | A | B | C | D |
|---|---|---|---|---|
| near starting | WATCH — Setup is in early accumulation; long-horizon monitoring only until pattern tightens. | WATCH — Early-stage structure with middling edge; wait for the pattern to mature before committing size. | WATCH — Weak edge this early — log it and move on. | WATCH — Poor edge at an early stage; keep on watch only in case the grade improves. |
| just started | WATCH — High-grade setup but pattern is still early; alert me the moment it moves to approaching. | WATCH — Monitor; no capital at risk this early. | WATCH — Low-edge early-pattern — watch only. | AVOID — Very low edge on an early setup — skip. |
| approaching | PILOT 25% High-edge setup approaching the trigger; get 25% in early with stop below pattern support. | WATCH — Grade B approaching — wait for the breakout bar rather than paying up early. | WATCH — C-grade approach; alert only, do not pre-position. | AVOID — D-grade approach — edge too thin to risk capital. |
| breaking | FULL ENTRY 100% A-grade breakout in progress — take full size with a 1.5×ATR (or structure) stop and ride into target2. | FULL ENTRY 70% B-grade breakout — take 70% size; trim slightly for edge dilution vs. A. | PILOT 35% C-grade breakout — pilot only (35%). Add on a successful retest or skip. | AVOID — D-grade breakout — historical edge is negative. Skip even if it prints. |
| near completing | TRAIL 67% A-grade, mature move — bank 33% at target1 and trail the rest up to breakeven+. | TRAIL 67% B-grade mature move — trim 33% and trail with a breakeven+ stop. | TAKE PROFIT exit C-grade mature move — realize gains and redeploy capital to a higher-edge setup. | TAKE PROFIT exit D-grade mature move — exit in full immediately; historical edge is poor. |
Stop-loss basis
- pattern_invalidation — the specific price that would kill the pattern (e.g. close below the flag low for a bull_flag).
- below_structure / above_structure — a tick below support for longs or above resistance for shorts, with a 0.3% buffer.
- atr_multiple — 1.5× ATR(14) from entry; used when neither an explicit invalidation nor a structural level is available.
Targets & RR
Target 1 uses the detector's published target when available, otherwise projects the pattern height (e.g. flag pole) from the breakout trigger, and falls back to 2× risk if neither is known. Target 2 is only produced for A/B-grade signals — 2× the entry-to-target1 distance, effectively an RR of 2× target1's RR.
Advisory only — the engine never auto-places orders. Execute via paper-trading-v2 or your own broker flow.