New edge proposed: tick_rule_reversal_signal — E8 Intelligence Research

Abstract

{ "name": "tick_rule_reversal_signal", "source": "Traditional price action - 'tick rule' from Larry Williams and popularized in 'The Playbook' by Jack Schwager", "type": "entry_engine", "rule": "Enter short when price makes a new 30-bar low but that low was printed on a positive tick (i.e., the close of the bar is above the low and the bar's high is below the previous bar's high), and enter long when price makes a new 30-bar high but that high was printed on a negative tick (close below high and low above previous low), with a stop at the extreme of the signal bar and a target at 1.5x the average true range (ATR) of the last 20 bars.", "pseudocode": "if bar.low == min(low, 30) and bar.close > bar.low and bar.high < prev.high: short_signal = true\nif bar.high == max(high, 30) and bar.close < bar.high and bar.low > prev.low: long_signal = true\nif valid_signal: entry = bar.close\nstop = signal_bar.low - 0.1*ATR for long, signal_bar.high + 0.1*ATR for short\ntarget = entry + sign * ( Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com