Volume-Confirmed Donchian Breakout¶
What it does: Buys a 20-candle high only when volume surges and buying pressure confirms it. This buys when the price breaks above its highest high of the last 20 candles, volume is at least 1.5 times its 20-candle average, and On-Balance Volume (running buy-versus-sell volume) is rising.
Style: Breakout · Difficulty: Intermediate · Risk: medium · Ready: 2 of 2 variants
When people use it: It tends to work on breakouts from quiet consolidation.
Where it struggles: It struggles when volume spikes come from forced liquidations, or from fake (wash-traded) volume on small exchanges.
Markets it was written for: BTC, ETH, liquid alts (volume on small venues is unreliable). Timeframes: 4h (1h-1d).
Open it in the Strategy Library (on the Strategies page), pick a variant, adjust the settings and press Add to my strategies. It becomes your own strategy: edit, backtest or trade it like any other.
Long¶
Buys a 20-candle high only when volume surges and buying pressure confirms it.
Labels: Breakout, Long, Spot, Intermediate, Medium
- Direction: Buy (long) · Market: spot
- Trigger: On candle close · Main timeframe: Auto (4h)
Entry
- IF Price crosses above Donchian(20,20) Upper 1 bar ago (4h) and Volume(20) > 1.5 × Volume SMA(20) (4h) and OBV rising over 5 bars (4h)
Exit: Indicator-Based Exit
- IF Price crosses below Donchian(10,10) Lower 1 bar ago (4h)
- Loss controls: Stop-loss % 6%
Settings
| Setting | Default | Editable | What changing it does |
|---|---|---|---|
| Volume multiple | 1.5 | Yes | How much above its average volume must be. Higher only takes breakouts with a big volume surge (fewer, stronger signals); lower takes more breakouts, including weaker ones. |
| Entry channel | 20 | Yes (sets 2 fields) | How many candles the breakout must clear. Lower trades more often with more false breakouts; higher trades rarely, only on bigger moves. |
How it works (as shown in the app)
- This buys when the price breaks above its highest high of the last 20 candles, volume is at least 1.5 times its 20-candle average, and On-Balance Volume (running buy-versus-sell volume) is rising.
- It sells when the price breaks below the lowest low of the last 10 candles, or at the stop-loss.
- It tends to work on breakouts from quiet consolidation.
- It struggles when volume spikes come from forced liquidations, or from fake (wash-traded) volume on small exchanges.
- Built for 4-hour candles (1 hour to 1 day also work). It reads volume on closed candles only.
Short (perp)¶
Shorts a 20-candle low only when volume surges and selling pressure confirms it.
Labels: Breakout, Short, Futures, Medium, Backtest Only
- Direction: Sell (short) · Market: swap
- Trigger: On candle close · Main timeframe: Auto (4h)
Entry
- IF Price crosses below Donchian(20,20) Lower 1 bar ago (4h) and Volume(20) > 1.5 × Volume SMA(20) (4h) and OBV falling over 5 bars (4h)
Exit: Indicator-Based Exit
- IF Price crosses above Donchian(10,10) Upper 1 bar ago (4h)
- Loss controls: Stop-loss % 6%
Settings
| Setting | Default | Editable | What changing it does |
|---|---|---|---|
| Volume multiple | 1.5 | Yes | How much above its average volume must be. Higher only takes breakouts with a big volume surge (fewer, stronger signals); lower takes more breakouts, including weaker ones. |
| Entry channel | 20 | Yes (sets 2 fields) | How many candles the breakout must clear. Lower trades more often with more false breakouts; higher trades rarely, only on bigger moves. |
How it works (as shown in the app)
- This shorts when the price breaks below its lowest low of the last 20 candles, volume is at least 1.5 times its 20-candle average, and On-Balance Volume (running buy-versus-sell volume) is falling.
- It buys back when the price breaks above the highest high of the last 10 candles, or at the stop-loss.
- It tends to work on breakdowns from quiet consolidation.
- It struggles when volume spikes come from forced liquidations, or from fake (wash-traded) volume on small exchanges.
- Built for 4-hour candles (1 hour to 1 day also work). It reads volume on closed candles only.
- Shorting means you profit if the price falls and lose if it rises.
- Suggested leverage is at most 3x. On isolated margin, at 3x the exchange closes the position (liquidation) if the price moves about 33% against you, and you lose the margin you put into it. Keep your stop well inside that.
- For now this version runs in backtests only; paper and live futures trading are coming later.
Warnings¶
- "Backtest only for now: paper and live trading of shorts are coming later.": shown on short variants. They need perpetual or futures pairs.
- Some variants suggest leverage. On isolated margin a liquidation loses the margin in that position; keep any stop well inside the liquidation distance (the Trade Builder warns you when it isn't).
- Once added, the strategy's conditions get the usual condition checks. Messages show under each condition on the entry / exit conditions screen; setting errors start with the indicator's short name (for example "MACD: Fast must be between 1 and 1000") and block saving, while the other warnings never block saving and repeat in the strategy's Entry or Exit section. See the indicator pages below for each one.
- "You already have this strategy with these settings (…). Change a setting to add another copy.": shown on the variant's page in the Strategy Library when you already added this variant with the same settings.
Good to know¶
- After you add it, the strategy keeps the library's trigger and an Auto main timeframe; you can change both in the builder. Nothing links it back to the library, except that the builder still shows the library's explanations in the info bubbles.
- Changing a setting before adding it also changes the saved name, so you can tell copies apart.
- Past results don't predict future ones. Try it in a backtest and on paper before using real money.
- Indicators used: Donchian Channels, OBV, Volume.