The VCP strategy looks for a sequence of narrowing price ranges. As each range contracts, energy builds for a breakout. The system measures range size and waits for a break above the highest high or below the lowest low.
Once contraction is observed, a breakout beyond the recent extremes triggers a trade in that direction. Price crossing the moving average is used to manage exits.
This approach aims to capture explosive moves following a volatility squeeze.
Entry Criteria: Range contraction then breakout of recent high/low.
Long/Short: Both directions.
Exit Criteria: Price crosses MA or stop.
Stops: Yes.
Default Values:
MAPeriod = 20
LookbackPeriod = 20
CandleType = TimeSpan.FromMinutes(5)
[*]Filters:
Category: Breakout
Direction: Both
Indicators: Range, MA
Stops: Yes
Complexity: Intermediate
Timeframe: Intraday
Seasonality: No
Neural Networks: No
Divergence: No
Risk Level: Medium