52-Week High Breakout

Entry Logic

Enter on a close above the 52-week high. Confirm with significant volume. Use a 15-minute timeframe. The 52-week high must be a well-defined resistance. Market condition: trending up.

Exit Logic

Target 1: 1.0R. Target 2: 2.0R. Scale out 50% at Target 1. Trail remaining position with a 20-period EMA. Exit entire position if price closes below 20-period EMA. Exit entire position after 90 minutes if momentum stalls.

Stop Loss Structure

Place hard stop 0.75% below the breakout candle's low. Max dollar loss: $250. Max percent loss: 1.0%. Structural stop: below the previous support level.

Risk Management Framework

Risk 1.25% of capital per trade. Daily loss limit: 4%. Weekly loss limit: 8%. Max drawdown: 12%. R:R requirement: minimum 1.2:1.

Position Sizing Model

Size based on 1.25% risk of capital. Volatility adjustment using Historical Volatility. Conviction sizing: high conviction trades increase size by 0.75R. Scale in on confirmed retests of the 52-week high.

Trade Filtering

Only trade stocks with a clear 52-week high resistance. Avoid range-bound markets. Do not trade during earnings reports. Focus on instruments with strong fundamental stories.

Context Framework

Confirm daily and weekly trend is up. Price must be above VWAP. Price must be above 20-period and 100-period moving averages. Breakout must occur from a consolidation near the 52-week high.

Trade Management Rules

Move stop to breakeven after 0.75R profit. Scale out 50% at 1.0R. Add size on a confirmed retest of the 52-week high, if volume is present. Manage slow moves with tighter trailing stops.

Time Rules

Optimal entry window: 10:00 AM - 12:00 PM EST. Avoid entries after 3:00 PM EST. Session notes: mid-day volatility can be lower.

Setup Classification

A+: Clean 52-week high, high volume breakout, strong sector. A: Clean 52-week high, good volume breakout, stable sector. B: 52-week high breakout, average volume, moderate sector. C: Weak 52-week high, low volume, weak sector.

Market Selection Criteria

Trade NYSE/NASDAQ listed stocks. Volume above 2 million shares daily. Average daily range above 1.5%. Avoid penny stocks.

Statistical Edge Metrics

Expected win rate: 50%. Average win: 1.5R. Average loss: 0.9R. Profit factor: 1.2. Expectancy: 0.15R.

Failure Conditions

Strategy fails if the market enters a prolonged consolidation. Strategy fails if breakouts lack follow-through. Strategy fails if volume consistently dries up.

Psychological Rules

Be patient. Do not chase trades. Manage risk. Review trades objectively. Stay calm under pressure.

Advanced Components

Regime detection: only trade in expansionary regimes. Filters: sector strength filter. Correlation: avoid highly correlated sectors. MTF alignment: monthly and quarterly charts must show upward momentum.

Location

Strongest: strong sector rotation environments. Weakest: broad market sell-offs.