AMD Volatility Breakout

## AMD Volatility Breakout — Full Methodology

### Volatility Compression Detection

1. **Keltner Channel squeeze:** Bollinger Bands (20, 2σ) must be inside the Keltner Channels (20, 1.5× ATR) for ≥ 4 consecutive days

2. **ATR contraction:** ATR(14) must be below its 20-period SMA (low-volatility regime)

3. **Consolidation pattern:** Price range over the last 5 days must be < 50% of the 20-day average range

### Entry Criteria

1. **Breakout candle:** Price closes outside the Keltner Channel (upper for long, lower for short)

2. **ATR expansion:** ATR(1-day) > 1.5× ATR(14) on the breakout day

3. **Volume surge:** Volume ≥ 1.8× the 20-day average volume

4. Enter at the close of the breakout candle

### Exit Rules

- **Profit target:** 3× ATR(14) from entry

- **Stop loss:** Midline of the Keltner Channel (20-period EMA)

- **Trailing stop:** After 2× ATR gain, trail at 1× ATR below highest close

- **Time stop:** Exit after 12 trading days

### Position Sizing

- Risk 1% of portfolio — AMD is high-beta, so position sizes should be conservative

- Position size = (Portfolio × 0.01) / (Entry − Stop)

### Best Market Conditions

AMD thrives on semiconductor cycle narratives (AI, data center, gaming). Strategy works best when a catalyst is imminent (product launch, earnings) and the stock is coiling. Underperforms in slow, grinding markets without sector catalysts.

### Backtest Notes

Tested on AMD daily bars from Jan 2020 to Dec 2024. AMD's massive AI rally in 2023–2024 produced outsized winners. Pre-2023 performance was more modest with higher drawdowns.