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Breakout Strategy

The strategy aims to capture upward price movements (breakouts) by observing when the price exceeds a predefined range, known as the Donchian Channel, while also ensuring trading volume supports the move.

When Does It Open a Long Trade?

The strategy opens a long trade (buy position) when both of these conditions are met:

1. Price Breaks Above the Upper Band
- The current closing price is higher than the Upper Band of the Donchian Channel.
- This indicates a potential breakout, signaling upward momentum.

2. High Volume Confirmation
- The current trading volume is greater than 1.9 times the average volume over the Donchian Channel's length.
- This ensures the breakout is backed by significant market activity, reducing the chance of false signals.

Only when both conditions are true, the strategy will execute a long entry.

When Does It Close the Trade?
The strategy closes the long trade (exits the position) when:

1. Price Falls Below the Middle Band
- The closing price drops below the Middle Band of the Donchian Channel.
- This acts as a reversal signal, suggesting the upward momentum has weakened, and it’s time to exit the trade.
Bands and ChannelsbreakoutbreakouttradingVolume

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