New edge proposed: first_hour_range_exhaustion_breakout_fade — E8 Intelligence Research

{ "name": "first_hour_range_exhaustion_breakout_fade", "source": "Toby Crabel, Day Trading with Short Term Price Patterns and Opening Range Breakout", "type": "entry_engine", "rule": "Enter counter-trend at 14:00 UTC if price breaks the first 60-minute high/low by more than 0.25*ATR(14) but then closes back inside the range within 5 bars, with ATR(14) > 0.5*SMA(20) of ATR to avoid quiet markets.", "pseudocode": "OR_high = highest(high, bars 0-60min), OR_low = lowest(low, bars 0-60min) time == 14:00 and ATR(14) > 0.5*SMA(ATR(14),20): for each subsequent bar: if bar.low < OR_low - 0.25*ATR and bar.close > OR_low (or bar.high > OR_high + 0.25*ATR and bar.close < OR_high): next bar open: enter long if broke low, short if broke high stop = entry - 1.5*ATR (long), entry + 1.5*ATR (short) target = 1*ATR or close day, whichever first", "why_it_works": "False breakouts of the opening range often trap late momentum traders, creating a snap-back reversion to Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com