Quantitative model proposal demonstrates a short entry rule triggered by failed 10-bar breakouts on 4-hour intervals, highlighting corrective liquidation dynamics.
{ "name": "failed_breakout_pullback_trap", "source": "Tom Hougaard / Market Wizards - failed breakout traps", "type": "entry_engine", "rule": "Go short after a 4-hour bar makes a new 10-bar high (above prior 10 bars) but closes below its open, and the next bar opens within the prior bar's range and trades down below the prior bar's close.", "pseudocode": "if bar[1].high > highest(high, 10)[2] and bar[1].close < bar[1].open: if bar[0].open < bar[1].high and bar[0].open >= bar[1].low: if low[0] < bar[1].close: enter short at market", "why_it_works": "Breakouts that immediately fail and reverse trap late buyers, creating rapid corrective liquidation downward." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com
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Andrew Stewart Caldin (2026) studied this question.
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