| name | breakout-trading |
| description | Define and test closed-bar consolidation breakouts. Use when measuring boundaries, normalized break buffers, relative participation, retests, invalidation, and net execution costs. |
| license | Apache-2.0 |
| metadata | {"author":"ske-labs","version":"4.0"} |
Breakout Trading
Captures explosive moves when price breaks out of consolidation zones or key support/resistance levels.
Identification
Types: Horizontal (flat S/R, 3+ touches), Pattern (triangle/wedge/flag completion), Trendline (trend change signal).
Participation Confirmation
Measure breakout-bar volume against the same instrument's time-of-day baseline or a predeclared rolling median. Treat relative volume, RSI, and MACD as candidate filters to validate, not confidence grades or independent votes. Require a closed bar beyond the level by a volatility- or tick-normalized buffer; do not use future follow-through to label the original entry.
Workflow
1. Identify Consolidation
get_candles_around_date(symbol=<symbol>, exchange=<exchange>, interval=<interval>, date=<date>)
Look for tight range with 3+ touches on support/resistance.
2. Mark the Level
draw_chart_analysis(action="create", drawing={
"type": "resistance",
"points": [
{"time": <first_touch_time>, "price": <level_price>},
{"time": <current_time>, "price": <level_price>}
],
"options": {"text": "Breakout Level (<price>)"}
})
3. Check Volume and Momentum
get_indicators(indicator_code="mfi", symbol=<symbol>, exchange=<exchange>, interval=<interval>)
get_indicators(indicator_code="rsi", symbol=<symbol>, exchange=<exchange>, interval=<interval>)
get_indicators(indicator_code="macd", symbol=<symbol>, exchange=<exchange>, interval=<interval>)
Record the close-to-level distance in ATR or ticks, relative volume, spread, and momentum progression. Apply only filter thresholds fixed before the evaluation sample.
4. Entry and Target
Use the consolidation-height projection as a scenario, not a forecast. Choose and test one entry rule: closed-bar break or first retest within a predeclared bar window. Put invalidation back inside the range plus the tested buffer; size from that distance and modeled slippage.
5. Report to Orchestrator
Breakout type, volume multiple, entry recommendation, measured move target, stop level, false breakout risk assessment.
Evidence and Validation
- Treat the setup as a testable hypothesis, not a prediction. Define thresholds, entry, invalidation, and exit before evaluating outcomes.
- Calibrate on the same instrument, venue, session, and timeframe. Use closed candles and a held-out or walk-forward sample; record every variant tried.
- Include spread, fees, slippage, borrow or funding, partial fills, and latency. Reject the setup when net expectancy is not positive or depends on one narrow parameter.
- Return observed inputs, missing data, cost assumptions, entry, invalidation, exit, and a valid, watch, or no-trade status.
- Research basis: Opening-range breakout research finds conditional evidence for a specified rule, while the broader technical-analysis review warns about data snooping and costs.
Key Rules
- Require a closed-bar trigger; a wick alone is not an entry under this rule.
- Freeze the participation, buffer, retest-window, and invalidation definitions before testing.
- A close back inside the range invalidates the setup only if that exact rule was specified in advance.
- Do not move a stop to breakeven merely because volume declines; compare that management rule out of sample.
- Report
valid, watch, or no trade when the trigger, liquidity, or cost gate is missing.
Related Skills
- momentum-trading -- ride the continuation after consolidation breaks
- pullback-trading -- time the retest entry after breakout
