New edge proposed: ratchet_effect_momentum_continuation — E8 Intelligence Research

Abstract

{ "name": "ratchet_effect_momentum_continuation", "source": "George Soros / trend-following literature (ratchet effect in trending markets)", "type": "entry_engine", "rule": "Enter long when close > highest high of prior 20 bars AND close > close of prior bar AND prior bar range < 0.5 * ATR(14); enter short symmetrically.", "pseudocode": "if bar.close > highest(high, 20)[1] and bar.close > bar[1].close and bar[1].range < 0.5 * atr(14): long_entry(); if bar.close < lowest(low, 20)[1] and bar.close < bar[1].close and bar[1].range < 0.5 * atr(14): short_entry();", "why_it_works": "Combines 20-bar breakout with low-volatility compression (ratchet effect), triggering on momentum expansion in established trends." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com