New edge proposed: three_bar_breakout_with_volume_confirmation — E8 Intelligence Research

{ "name": "three_bar_breakout_with_volume_confirmation", "source": "J. Welles Wilder / classic momentum breakout literature", "type": "entry_engine", "rule": "Enter long when the current bar's close exceeds the highest high of the prior 3 bars, and the current bar's volume is at least 1.5 times the average volume of those prior 3 bars; enter short on the symmetric low-break condition.", "pseudocode": "if close > max(high[-3], high[-2], high[-1]) and volume > 1.5 * avg(volume[-3], volume[-2], volume[-1]): long_entry; if close < min(low[-3], low[-2], low[-1]) and volume > 1.5 * avg(volume[-3], volume[-2], volume[-1]): short_entry", "why_it_works": "Breakouts of short-term consolidation with above-average volume indicate genuine directional conviction, filtering out false moves and aligning with the classic principle that volume confirms price movement." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com