New edge proposed: three_session_engulfing_reversal — E8 Intelligence Research

Abstract

{ "name": "three_session_engulfing_reversal", "source": "Steve Nison, Japanese Candlestick Charting Techniques", "type": "entry_engine", "rule": "On the third consecutive down day, if the current day's body fully engulfs the prior day's body and closes above the prior day's open, enter long at the close (short for mirror condition), with no additional filters.", "pseudocode": "if close[3] < open[3] and close[2] < open[2] and close[1] < open[1]\n and close[0] > open[0]\n and open[0] <= close[1]\n and close[0] >= open[1]\n and (close[0] - open[0]) > 0.5 * (high[0] - low[0])\n then: buy at close[0]\n short mirror: three up days, bearish engulfing, sell at close", "why_it_works": "After three sessions of persistent selling, a full-body engulfing candle indicates a decisive shift in supply/demand balance, often marking a short-term exhaustion and reversal point." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com