SimmonsTrade
Model 8 — Coiled Breakout Strategy (EOD Entry)
Trading Playbook

📚 Strategy Overview

Model 8 captures explosive moves from low-volume consolidation patterns. Unlike premarket breakouts, this strategy uses end-of-day (EOD) entry to eliminate the need for early-morning monitoring.

What is a "Coiled Breakout"?

After a period of strength, the stock "coils up" on shrinking volume, like a spring being compressed. This creates the potential for an explosive move when volume returns.

Why EOD Entry?

By scanning after the close and entering at the next day's open, you capture the same moves without the stress of premarket monitoring or the risk of chasing intraday breakouts.

✅ Entry Criteria (Evening Scan)

Price Structure (Any of):
  • Inside Day Coil: Today's range completely inside yesterday's
  • Late-Day Reclaim: Closes in top 30% after intraday dip
  • Multi-Day Compression: 3+ days of tightening range
  • Low-Volume Coil: Volume in bottom 30% of 10-day range
Technical Filters (All Required):
  • Moving Averages: Price > 20-SMA, 8-EMA within 5% of 21-EMA, 20-SMA > 50-SMA
  • Volume Dry-Up: Today's volume in bottom 30% of 10 days
  • Relative Strength: 1-month gain > +10%
  • Quality: Price > $2, ADV > $500K

🔄 Trading Workflow

Evening Routine (4:00-5:30 PM ET)
  1. 4:00 PM: Run evening scan on Model 8 page (scans 2,430 stocks from Model 1 universe)
  2. 4:00-4:45 PM: Scan runs in background (~30-45 minutes, page can be closed)
  3. 4:45-5:15 PM: Review top 5-10 setups (sorted by score), check for catalysts
  4. 5:15-5:30 PM: Place market or limit orders for next day open
Next Day (9:30 AM ET)
  1. 9:30 AM: Orders fill automatically at open
  2. 9:31 AM: Set stop-loss orders immediately
  3. During Day: Monitor for +2R or +20% for partial exit
📅 Weekend Trading Strategy

Best Practice: Run scan Friday EOD, not Sunday

Why Friday 4-5 PM ET is optimal:

  • Uses actual Friday close data (fresh)
  • Weekend consolidation adds to the coil
  • Gives 2-3 days for deep research
  • Monday opens often explosive after weekend compression

Weekend workflow:

  • Friday 4-5 PM: Run scan, get results
  • Fri Eve - Sun: Research top setups, check weekend news
  • Sunday 6-8 PM: Place limit orders for Monday open
  • Monday 9:30 AM: Fills + set stops

Note: Don't run scan on Sunday — markets are closed, so you'd still be using Friday's data but with 2 days of staleness.

⚖️ Risk Management

💡 Limit Order Strategy (Recommended)

Use limit orders at Entry +1.5% (shown in green "Limit" column)

Why limit orders?

  • Controlled entry price → accurate risk management
  • Prevents overpaying on overnight gaps
  • Still captures most opportunities (1.5% buffer)
  • Better average entry vs market orders

Order Type by Score:

  • Score 75-85 (Standard): Limit +1.5%
  • Score 86-89 (Strong): Limit +2.0%
  • Score 90+ (Exceptional): Limit +2.5%
  • Catalyst-driven: Market order (likely to gap)

Example: Entry $45.50 → Limit $46.18 (+1.5%)

📋 If no fill by 10 AM: Assess current price. If within +2% of entry, consider market order. If >3% above, let it go—setup invalidated.

Entry & Position Sizing
  • Entry Method: Limit order at close +1.5% (see Limit column in table)
  • Position Size: 2-5% of capital per trade (based on conviction score)
  • Max Portfolio Risk: 15% total across all Model 8 positions
Stop Loss
  • Initial Stop: Below yesterday's low (typically -5% to -8%)
  • Max Risk: -8% hard stop (override setup stop if needed)
  • Stop Adjustment: Raise to breakeven after +1R gain

🎯 Exit Strategy

+2R
First Profit Target

Action: Sell 50% of position at +2R or +20% (whichever comes first)

Trail
Runner Management

Action: Use 15-min higher lows or daily 8-EMA as trailing stop

Day 5
Time Stop

Action: Exit remaining shares by end of day 5 if no strong momentum

📊 Backtest Performance

Backtested on 1,031 historical big movers (30%+ gain in 7 days over 60-day period)

98.5%
Win Rate (≥1R)
+4.87R
Avg Return
96.6%
Hit +2R
0.4%
Losses (<0R)
🏆 Top Performers: QMMM (+3,967%), STI (+476%), AGMH (+370%), RGTX (+192%), IONL (+147%)

🌟 Ideal Conditions

✅ Best Setups
  • Inside day on lowest volume in 10 days
  • 8/21 EMA pinch (within 2%)
  • Strong close position (>0.8)
  • Recent catalyst (earnings, FDA approval within 48h)
  • High score (>85)
  • SPY trending up (above 20-SMA)
❌ Avoid
  • Volume spike on consolidation day (not coiling)
  • Below 20-SMA (weak structure)
  • Score <70 (marginal setup)
  • Price <$2 or >$200 (liquidity issues)
  • Negative news/earnings miss
  • SPY in downtrend (below 20-SMA)

📈 Example Trade

ACME Corp — Inside Day Coil (Score: 92)

Setup (Oct 16, 4:30 PM):

  • Inside day on lowest volume in 10 days
  • 8/21 EMA pinch (8-EMA: $45.20, 21-EMA: $45.80)
  • Close position: 0.85 (strong close)
  • 1-month gain: +18%
  • Close: $45.50

Action: Place market order for 200 shares (5% position)

Execution (Oct 17, 9:30 AM):

  • Filled at open: $46.00 (entry)
  • Stop placed: $42.50 (-7.6%, yesterday's low)
  • First target: $53.00 (+15.2%, +2R)

Result: Hit $53.00 on Day 2 → Sold 100 shares (+15.2%). Trailed remaining 100 shares to $67.50 on Day 6 (+46.7%). Combined return: +31% on total position.

💡 Key Takeaways

  • Timing: Scan after close (4-5 PM ET), enter at next day open — no premarket stress!
  • Pattern: Look for volume dry-up, EMA pinch, and inside days after recent strength
  • Risk/Reward: Target +2R minimum, trail winners for 5-7 days
  • Win Rate: Historically 98.5% win rate (≥1R) on identified patterns
  • Position Size: 2-5% per trade based on conviction score
  • Time Commitment: 30-45 min each evening + quick morning check