Volume Breakout Strategy

Overview

Identifies price breakouts confirmed by high trading volume for stronger signal reliability.

How It Works

Looks for: 1. Price breaking above recent high or below recent low 2. Volume exceeding 1.5x the average volume

Trading Signals

Buy Signal

• Price breaks above 20-period high
• Volume > 1.5× average volume

Sell Signal

• Price breaks below 20-period low
• Volume > 1.5× average volume

Usage Example

prices = stock.df["adj_close_price"].to_a
volumes = stock.df["volume"].to_a

vector = OpenStruct.new(
  prices: prices,
  volumes: volumes
)

signal = SQA::Strategy::VolumeBreakout.trade(vector)

Characteristics

• Complexity: Medium
• Best Market: Breakout/trending
• Win Rate: 50-60%

Strengths

✅ Volume confirmation reduces false breakouts
✅ Catches strong moves
✅ Clear entry points

Weaknesses

❌ Rare signals
❌ Can whipsaw on false breakouts
❌ Requires both price and volume data