Use this paper-first breakout trading agent template to define a reusable setup, confirmation checklist, risk boundary, skip logic, and journal output before any simulated breakout decision is reviewed.
Breakout systems are easy to describe and hard to review. A price clears a level, attention rises, and the decision can feel urgent. This template slows that workflow down. It gives a paper trading agent a crawlable set of instructions for when a breakout setup is valid, when it is late, when it should be skipped, and what evidence must be written into the journal.
Trading Boy does not execute live trades, hold funds, or provide financial advice. This page is for simulated practice, paper-trading review, and agent workflow design. Use it with the paper trading hub, the AI trading agent rules workflow, and the AI agent risk controls page so the breakout agent stays inside written boundaries instead of reacting to market excitement.
| Block | What the agent must define | Review purpose |
|---|---|---|
| Market frame | Watchlist, timeframe, session, minimum liquidity, and the market regime being tested. | Prevents a breakout rule from drifting into unrelated momentum trades. |
| Breakout level | The resistance, range high, prior high, or compression boundary that must be cleared. | Makes the trigger observable in the journal. |
| Confirmation | Volume expansion, candle close, retest, relative strength, or other evidence required before action. | Separates planned breakouts from impulse entries. |
| Invalidation | The exact condition that proves the paper thesis is wrong, such as a close back inside the range. | Creates a clear exit and review standard. |
| Skip rule | Late extension, thin liquidity, missing confirmation, repeated failed attempts, or broad market conflict. | Turns avoided trades into useful evidence. |
Role: You are a breakout paper-trading agent for Trading Boy. You evaluate simulated breakout decisions only. You do not execute live trades, place orders, hold funds, or provide financial advice.
Market frame: Watch only [asset list] on [timeframe] during [session]. The setup is valid only when liquidity is above [minimum liquidity rule] and the broader market condition matches [allowed regime]. Ignore assets outside the test.
Breakout level: Define the level before the decision. Use [range high / prior high / resistance band / compression boundary]. The agent must state why the level matters and whether the current candle has cleared it by the required amount.
Confirmation: A simulated entry is allowed only when [volume rule], [close rule], and [momentum or retest rule] are all present. If confirmation is partial, the agent must skip and record which condition failed.
Invalidation: The thesis is invalid if price [closes back inside the range / loses the retest level / exceeds the maximum failed breakout count]. The journal must include the invalidation before any simulated entry is recorded.
Risk boundary: Use maximum paper risk of [amount or percent], maximum simulated position size of [size], maximum daily paper drawdown of [limit], and maximum correlated exposure of [limit]. Any setup that requires breaking these limits must be skipped.
Chase filter: Skip if price is more than [percent or ATR distance] above the breakout level before confirmation, if spread or liquidity is poor, or if the agent cannot define a nearby invalidation. Late is a skip reason, not a reason to increase size.
Output: For every paper entry, exit, or skip, write setup name, level, confirmation evidence, invalidation, paper risk, decision reason, emotional risk tag, and one question for the next post-trade review.
A breakout template should be specific enough to test, but not so complex that the agent can explain any decision after the fact. Start with one breakout family. For example, you might test range breakouts after consolidation, retest entries after a level is cleared, or failed-breakout avoidance. Do not combine every possible continuation pattern into one agent.
First, write the level rule. The agent should know whether it is watching a daily resistance area, an intraday range high, a volatility compression boundary, or a prior swing high. If the level is subjective, require the agent to state how it identified the level before it evaluates the trigger. Pair that rule with the pre-trade checklist so the journal captures the same fields every time.
Second, write the confirmation rule. Breakout agents often fail when they treat any move above a level as enough evidence. Require a close, a retest, a volume expansion, a relative-strength comparison, or another observable condition. If the confirmation is missing, the correct output is a skip. The skip should be logged beside the trade thesis journal template, because the avoided trade may explain later performance more clearly than a winning entry.
Third, write the failure rule. Every breakout template needs invalidation before simulated action. If the agent cannot name the level that proves the thesis wrong, it cannot calculate paper risk with a risk-reward calculator, and it cannot produce a useful review. A breakout without invalidation is only a story about price movement.
A good breakout agent names the level before the trigger, waits for the written confirmation, states invalidation, respects paper size limits, and logs skipped setups. It can explain why the decision matched the rule without claiming certainty about future price.
A weak breakout agent chases extended candles, moves invalidation after the fact, ignores liquidity, increases simulated size after missed entries, or writes confident summaries without the evidence needed for review.
The template works best when it is part of a review loop, not a standalone prompt. Use the AI trading agent prompt template to turn the blocks into instructions, the paper trading journal template to collect decisions, and the post-trade review template to inspect the result after the simulated exit.
Review batches of similar breakouts instead of judging one trade at a time. A single winning paper trade can hide weak process, and a single losing paper trade can still follow the rules. Group the journal by setup label, confirmation type, time of day, extension from the breakout level, and skip reason. Then compare the agent output against the AI paper trading agent evaluation page.
Keep the language plain. The agent should not say the breakout is strong unless strong has been defined by the rule. Use terms like close above level, volume above baseline, retest held, spread inside limit, or skip because extension exceeded the chase filter. Those phrases make the review audit possible. They also keep the workflow aligned with paper trading limitations: simulation can help evaluate process, but it is not a promise about live execution, slippage, fees, liquidity, or emotional pressure.
A breakout trading agent template is a reusable set of paper-trading instructions that defines the breakout setup, confirmation evidence, invalidation, risk boundaries, skip rules, and journal output an agent must follow.
The template should require a written trigger, maximum extension from the breakout level, volume or momentum evidence, a clear invalidation level, and skip rules for late entries, thin liquidity, or missing confirmation.
No. This template is for paper trading, simulation, journaling, and review. Trading Boy does not execute live trades, hold funds, or provide financial advice.