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Strategies / Breakout / Volatility Band Downside Breakout

Volatility Band Downside Breakout

Sells short when the close moves more than 2 times the 20-period ATR below the 20-period EMA, which is treated as the start of a new downtrend. It closes the short once the close rises back above the EMA.

BreakoutShort onlySwingGBP/USDDaily
1.33Profit factor
4,735Net profit USD
41.95%Win rate
174Trades
-2,796Max drawdown
27.21Avg trade

Best run of 1. GBP/USD, Daily, spread 1.8, from run pf:2026-10-10-GBPUSD-D.tsv:8.

Entry rules, short

Exit rules

  1. The close rises above the 20-period EMA, and the short position is closed at market.

Test conditions

PeriodUp to 2026-10-10
InstrumentGBP/USD, Daily
Spread1.8 points
Starting capital1,000,000
CostsSpread only. Commissions and overnight financing are not included.
BarsUp to 200,000 bars, fewer where the instrument has less history
Last tested2026-10-10

Every run

Markets and timeframes tested

MarketTimeframePFTradesWin %NetMax DD
GBP/USDBest runDaily1.33 17441.954,735 USD-2,796

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// Volatility Band Downside Breakout
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Breakout
// Direction: Short only
// Timeframe tested: Daily
// ==============================================================

DEFPARAM CumulateOrders = false
ONCE capital = 10000

20 more lines: the entry and exit rules.

Setup

How to load it

  1. Copy the code with the copy button on the code block.
  2. In ProRealTime, open a chart of the instrument and timeframe you want to test, then open ProOrder > New trading system and choose "Create with programming".
  3. Paste the code, give the system a name and save it.
  4. Click "Backtest", set your own spread and position size, and run it before you consider trading it live.

Indicators used

ATREMA
Read this firstKnown weaknesses3 points
  • The maximum drawdown of 2,796 USD is large next to the net profit of 4,735 USD.
  • It was only tested on GBP/USD, so there is no evidence from other markets.
  • The code sets no stop loss, so a losing trade stays open until an exit signal arrives.

Questions

About this strategy

Can I run Volatility Band Downside Breakout in ProOrder?

Yes. The code is ProBuilder and runs as an automated ProOrder system. Backtest it on your own account with your own spread and position size before trading it live.

Which markets was it tested on?

It was tested on one combination, GBP/USD, Daily, with a profit factor of 1.33 over 174 trades.

How large was the drawdown?

The best run had a maximum drawdown of 2,796 USD at the tested position size, against a net result of 4,735 USD.

Does it trade long, short or both?

It only takes short trades.

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Also a breakout strategy.

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See how ProRealAlgos combines strategies like this into one automated portfolio.

The ProRealAlgos community gets the full rules, the complete code and the automated portfolio.

Past backtest results do not guarantee future results. This is not financial advice. Curated and maintained by ProRealAlgos. ProRealTime™ is a trademark of ProRealTime SAS. prorealalgos.comStatsDocs