Efficient Intensity Breakout System

Family: breakout · Regime: trending · Complexity: medium · Asset classes: Equities, FX, Crypto · Timeframes: H1, H4, D1

Thesis

The strategy assumes that breakouts occurring when price moves 'easily' (positive EOM for longs, negative for shorts) represent a genuine shift in market equilibrium where liquidity is thin in the direction of the break. By combining this efficiency check with long-term trend intensity (TII) and short-term buyer strength (Bulls Power), the strategy attempts to filter out high-volume 'churn' breakouts that often result in traps. The exit logic relies on the Bollinger Band midline to trail the trend until the mean-reversion pull becomes stronger than the momentum.

Components

• Ease of Movement (EOM) (regime) — Acts as a regime filter to ensure the market is 'efficient' (price moving without excessive volume churn), which typically precedes cleaner breakouts.
• Trend Intensity Index (TII) (direction) — Provides the directional bias by quantifying the strength of the long-term trend relative to its mean.
• TradeBreakOut (TBO) (entry) — Identifies specific price levels where local market structure (50-period high/low) is violated to trigger entry.
• Bollinger Bands (Standard) (exit) — Uses the SMA (mid-line) as a trailing exit to capture the trend until price mean-reverts beyond the volatility average.
• TMA Risk Panel (risk) — Calculates position sizing and stop-loss distance based on dynamic market volatility.
• Bulls Power (confirmation) — Confirms that the breakout is supported by immediate-term buying pressure (bulls) or selling pressure (bears).

Known failure conditions

• Hypothesis is invalidated if breakouts consistently fail despite positive EOM readings (suggesting volume exhaustion rather than efficiency).
• Strategy fails if TII remains in extreme zones (>80 or <20) during prolonged ranging markets without price follow-through.

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