Breakaway Gap
BullishContinuationBeginnerPrice leaves a sideways range in one jump, with a hole behind it.
Verdict: SkipBitcoin 4H: 0 trades, won —, avg trade — vs random day — (too few trades to judge). Backtest
First, a sideways range. Buyers and sellers are stuck between the same high and the same low.
step 1/6
Trade rules
| Direction | Long (buy) |
|---|---|
| Entry | A gap up out of a sideways range: the whole candle opens above the high of the previous 20 candles, a range no taller than 5 average candles. A candle CLOSES above the gap candle's high within 3 candles. |
| Cancelled if | Price trades below the high of the candle before the gap (the gap fills) before that close. |
| Target | Range height, projected from the breakout |
3 common mistakes
- Chasing a gap that opens inside the range: it has to clear the range high.
- Calling it a breakaway after a long rally: that's a runaway or an exhaustion gap.
- Putting the stop deep inside the range instead of just under the gap.
Backtest
same rules every time · equal size · no fees · method| Market | Trades | Won | Avg trade | Random day |
|---|---|---|---|---|
| Bitcoin · 4H · 2017-2026 · too few trades to judge | 0 | — | — | — |
| US large caps (50) · 1D · 2016-2026 | 266 | 50% | +1.01% | +1.44% |
Verdict: SkipIt made money, but less than buying on a random day. Bitcoin had too few signals to judge.
pattern +268%random +382%