Volatility Contraction Pattern (VCP)
BullishContinuationAdvancedEach pullback is smaller than the last. When the swings go quiet, price is ready.
Verdict: SkipBitcoin 4H: 35 trades, won 46%, avg trade +0.1% vs random day +0.3%. Backtest
It starts in an uptrend. Price runs up, then pulls back hard from its high.
step 1/7
Trade rules
| Direction | Long (buy) |
|---|---|
| Entry | In an uptrend, 2 to 4 pullbacks from about the same high, each shallower than the one before; then a candle CLOSE above the last pullback's high (the pivot). |
| Cancelled if | Price trades below the last pullback's low before the breakout. |
| Target | First pullback, projected from the breakout |
3 common mistakes
- Buying before the pivot breaks, while the base is still forming.
- Counting pullbacks that do not shrink: each one must be smaller than the last.
- Looking for it in a downtrend: it is a pause inside an uptrend.
Backtest
same rules every time · equal size · no fees · method| Market | Trades | Won | Avg trade | Random day |
|---|---|---|---|---|
| Bitcoin · 4H · 2017-2026 | 35 | 46% | +0.08% | +0.33% |
| US large caps (50) · 1D · 2016-2026 | 366 | 43% | +0.76% | +1.35% |
Verdict: SkipIt made money, but less than buying on a random day.
pattern +2.9%random +11%
pattern +279%random +494%