Volume breakouts: the strategy Aval follows

The idea

When price clears the recent high on above-normal volume, there is a chance the move continues. Many traders have buy orders above highs, and many shorts have stops in that area. The breakout triggers those orders and can gain strength.

The rules

These rules are calculated by code, the same way every time. No language model decides whether the setup exists.

• 1-hour chart. The close clears the high of the previous 4 candles.
• The candle's volume is at least 1.5 times the average of the last 20 candles.
• The close is above the 50-day exponential moving average on the daily chart, to trade with the larger trend.
• The short is the mirror image: a close below the low of the 4 candles, high volume, and price below the daily average.
• The stop goes beyond the extreme of the previous 4 candles. The target sits at 2.5 times the stop distance.

Where the score comes in

Once the code finds a setup, JEV, a decision model from TypeSafe, gives it a score from 0 to 10 and shows the probability for each criterion, such as trend, volume, liquidity and risk/reward. It also vetoes setups that look like manipulation and setups that go against the daily chart. A score below 5 is vetoed automatically.

When the strategy fails

• Sideways market: price breaks out, comes back and breaks out the other way. This is where stops pile up, which is why there is a six-hour pause after three stops.
• News the chart cannot see: an announcement can run over any technical pattern.
• Low liquidity: high volume on a small coin can be manipulation, not real interest.
• Extreme funding: a breakout when everyone is already leveraged to the same side tends to be fragile.

How to track the results

The Aval account trades this strategy on paper, with real prices and fees deducted. The public scoreboard shows the win rate by score range, so you can see whether high scores really win more often than low ones.