New edge proposed: iceberg_order_absorption — E8 Intelligence Research

{ "name": "iceberg_order_absorption", "source": "Tom Williams / VSA (Volume Spread Analysis) 2014 Master the Markets", "type": "entry_engine", "rule": "Enter short when the current bar closes below the prior bar's low, the prior bar's volume is at least 2.5x the 20-bar median volume (absorption), and the prior bar's spread (high-low) is smaller than the 20-bar average spread (effort without result).", "pseudocode": "avg_spread = avg(high - low, 20); med_vol = median(volume, 20); if close < close[1] and close < low[1] and volume[1] >= 2.5 * med_vol and (high[1] - low[1]) < avg_spread then entry_short = true; stop = high[1] + 0.5 * ATR(14); target1 = close - 1 * ATR(14); target2 = close - 2 * ATR(14);", "why_it_works": "Large volume on a narrow-range bar signals institutional absorption of supply, and the subsequent breakdown below that bar's low confirms exhaustion of buying interest, leading to a sharp move lower." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com