This is a trend-following breakout strategy written in Pine Script v5. Let me break it down section by section so you can see the logic clearly:
? Strategy Setup
strategy(title="CRCL Trend-Following...", overlay=true,
initial_capital=100000, commission_type=strategy.commission.percent, commission_value=0.02,
pyramiding=0, default_qty_type=strategy.percent_of_equity, default_qty_value=10)
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Initial capital: $100,000
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Commission: 0.02% per trade
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Pyramiding: 0 (no adding to existing positions)
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Position size: 10% of equity per trade
? Inputs
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Moving Averages: MA50 (short) and MA200 (long)
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Momentum filters: RSI (daily & weekly), MACD
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Breakout filters: Must be within 15% of 52-week high, and break above N-day high (default 20 days)
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Liquidity filters: Min price $5, min avg volume 500k, volume must exceed 20-day SMA × 1.2
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Stops & Targets: ATR-based stop loss (default 2× ATR), or fixed % stop (7%) if ATR disabled
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Profit target: 3× risk (R multiple)
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Trailing stop: Optional ATR-based trailing stop (default 3× ATR)
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Breakeven rule: Move stop to entry after 1R gain
Calculations
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Trend check:
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Price > MA50 > MA200
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Both MAs sloping upward
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Momentum check:
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MACD line > 0 and above signal line
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RSI > 50 (daily and optionally weekly)
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No bottom-fishing: Must be within 15% of 52-week high
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Breakout trigger: Close > yesterday’s N-day high
Entry Condition
entryCond = priceOK and liquidity and trendOK and momOK and wkOK and noBottom and breakout and volOK
All filters must pass: price, liquidity, trend, momentum, weekly RSI, near 52W high, breakout, and volume surge.
? Risk Management
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Stop loss: ATR-based or % stop
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Take profit: 3× stop distance
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Trailing stop: Ratchets upward with ATR
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Breakeven rule: Once price moves 1R in your favor, stop is moved to entry
Visuals
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Plots MA50, MA200, 52-week high, stop loss, take profit, and trailing stop
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Marks entry signals with a green triangle
Alerts
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Entry alert when breakout condition is met
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Stop hit alert if stop loss is triggered
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Target hit alert if take profit is reached
Big Picture
This script enforces strict discipline:
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Only trades uptrends near highs (no bottom-fishing)
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Requires momentum confirmation (RSI, MACD, volume)
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Uses strict risk control (ATR stops, breakeven, R-multiple targets)
It’s essentially a CAN SLIM–style breakout system with modern risk management.
