New edge proposed: cessation_of_loss_phase_reversal — E8 Intelligence Research

{ "name": "cessation_of_loss_phase_reversal", "source": "Al Brooks, Trading Price Action Reversals (magnetic pull of prior move / final flag reversal)", "type": "filter_flag", "rule": "Only go long after a 5-bar measured move down of at least 1.5 * ATR(14) where the final two down bars close below the lower Bollinger(20,2) band and the next bar is an inside bar with close above its open; only go short for the mirrored condition.", "pseudocode": "filter LONG: if close[1] < lower_band[1] AND close[2] < lower_band[2] and low[1] > low[0] and high[1] < high[0] // inside bar at index1 and close[1] > open[1] and (low[4] - close[0]) / avg_true_range >= 1.5 // measured down move flag valid; mirror for SHORT using upper_band and outside down bar", "why_it_works": "It captures the exhaustion of a strong directional leg (squeeze beyond volatility band) followed by the first sign of consolidation and internal strength, a high-probability reversal setup in trend exhaustion." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com