New edge proposed: three_bar_inside_bar_breakout_filter — E8 Intelligence Research

{ "name": "three_bar_inside_bar_breakout_filter", "source": "Al Brooks - Price Action Trading", "type": "filter_flag", "rule": "Only trade if the current bar closes above the high of the prior bar after a prior bar that is an inside bar, and the bar before that has a range greater than 1.5 times the 20-period average range.", "pseudocode": "if bar[i-2].range > 1.5 * avg_range(20, i-2)\n and bar[i-1].high <= bar[i-2].high\n and bar[i-1].low >= bar[i-2].low\n and bar[i].close > bar[i-1].high\n then allow_trade = true", "why_it_works": "Captures a breakout from a tight consolidation after an expansion, indicating a high-probability continuation with reduced risk of false moves." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com