Volume Surge System

Is there anything more satisfying for a trader than capturing a huge breakout? Looking at hundreds of charts for a high volume breakout pattern can be tedious and time consuming but with this system you can scan more than 5000 charts in seconds. The Volume Surge System is designed to detect such breakouts on increasing volume and it will initiate long signals anticipating (hopefully) a sudden and very strong (possibly gap) breakout. The new version filters out stocks with a low probability of a breakout using my custom FVE, VFI and VPN money flow Indicators. 

VPN System

This System is based on my custom VPN Indicator published in the April 2021 issue of “Technical Analysis of Stocks and Commodities” and will detect possible breakouts on higher volume and expanding volatility. In my article I presented a basic system to test the efficacy of the VPN Indicator. This is not, however, the same system but is using volatility and other technical criteria to filter out breakouts with a low probability of success . The VPN system doesn’t normally produce a lot of hits so I included a light system, the VPN2L, which produces more hits but the performance is not so good.

The VPN and Volume Surge system performs best on small and medium cap stocks and should be applied on daily charts. You can purchase the Amibroker or Metastock versions by selecting the appropriate tab from the menu at the left.

EXAMPLE

You can see here that in the case of Aurora Cannabis (ACB) the system detected a high volume breakout on 4/2/24. The stock was up 44% the next day .

This is how the systems performed during the latest seven year period until May 2024 on all Russel 2000 stocks
To produce the test results I used Amibroker Pro with the following test parameters:
Max. Open positions: 12
Commissions: .5 c per share
Volume filter: Limit position to 5% of trading volume