Breakout Trading Strategy: We Backtested 4 Breakout Rules on NSE After Charges

A breakout is a move of price beyond a level the market has respected: the highest high of the last 20 days, yesterday's high or low, the opening range, or a Bollinger Band. The idea is that price tends to keep going once it clears the level. Whether that is true after charges is the question here.

• 20-day high breakout (daily): Buy when the daily close is above the highest high of the previous 20 sessions. Exit when the close falls below the 10-day low, or at a stop 2 x ATR(14) below the entry. Delivery, long only.
• 20-candle high breakout (15-minute): The same logic on 15-minute candles: close above the highest high of the previous 20 candles, exit below the 10-candle low or at a 2 x ATR(14) stop, intraday square-off; long only.
• Previous-day high/low breakout (15-minute): Buy when a 15-minute candle closes above yesterday's high; sell short when it closes below yesterday's low. Stop 1%, target 2%.
• Opening range breakout (15-minute): The range is the first 15 minutes (09:15 to 09:30). Buy when a 15-minute candle closes above the range high; sell short below the range low. Stop 1%, target 2%.
• Bollinger Band breakout (15-minute): Buy when a candle closes above the upper Bollinger Band (20, 2); sell short when it closes below the lower band. Stop 1%, target 2%.
• Bollinger Band breakout (daily): Daily candles, long only, delivery: buy when the close is above the upper band (20, 2). Stop 3%, target 6%.

The first four use stops and targets set at the start; position size, charges and slippage are the house settings used across LeadFinn's published tests (₹1,00,000 account, 20% per trade, up to 5 open trades).

Daily swing version, last year: 58 trades, -₹23,269 (-23.3%) after delivery charges. The same rule on 15-minute candles with intraday square-off: 1,536 trades, -₹30,687 (-30.7%).

A single year is a short test for a swing rule, so we also ran the daily rule on all the daily history we hold (2017-07-03 to 2026-10-07). Without the volume filter: 405 trades, 32.4% won, +₹12,473 (+12.5%) after charges. With the volume filter: 272 trades, +₹27,538 (+27.5%). Buy and hold of the same stocks over that period returned 198.01% on average per stock, for comparison.

Year by year (trades closed in each year, after charges):

Read the long run with care: it is a rule tested on the stocks that are in the index today, and the rupee figure is for one ₹1,00,000 account.

Previous-day high/low breakout (15-minute): 1,623 trades, 42.0% won, price moves +₹5,261, charges -₹27,947, result after all costs -₹27,947 (-27.9%).

With the volume filter (breakout candle volume at least 2 times its 20-candle average): 785 trades, 38.5% won, result -₹12,684 (-12.7%).

Opening range breakout (15-minute): 1,671 trades, 43.8% won, price moves +₹9,491, charges -₹29,334, result after all costs -₹25,363 (-25.4%).

With the volume filter (breakout candle volume at least 2 times its 20-candle average): 629 trades, 32.4% won, result -₹14,040 (-14.0%).

Bollinger Band breakout (15-minute): 1,831 trades, 40.4% won, price moves +₹5,518, charges -₹30,565, result after all costs -₹30,800 (-30.8%).

With the volume filter (breakout candle volume at least 2 times its 20-candle average): 1,263 trades, 36.5% won, result -₹26,939 (-26.9%).

A common rule of thumb is to trust a breakout only when volume jumps. We added one condition to every rule: the breakout candle's volume must be at least 2 times the average of the last 20 candles.

The filter gave a better result after charges in 6 of 6 rules. Most of that comes from fewer trades and so fewer charges: the price moves before costs were higher with the filter in only 2 of 6 rules. The daily rules took only 13 to 21 trades with the filter, so treat those two results as anecdotes, not evidence.

There is no single agreed way to count a failed breakout. Here a false breakout is a trade that hit its stop without first moving one stop-distance (1R) in its favour. It does not count trades that reached 1R and then reversed. Other definitions, such as price closing back inside the level within 3 candles, were not measured.

Intraday trades pay intraday charges and are closed by the end of the day; swing trades pay delivery charges and can be held for days. They are different trades with different charges, so compare the last column, not the trade counts.

To see which stocks are breaking out today, use the daily scans: breakout stocks, 20-day high breakouts, Bollinger Band breakouts, volume at least 2 times average and NR7 stocks. The scans list the stocks; this page tests the rules.