New edge proposed: prior_day_high_low_break_with_close_confirmation — E8 Intelligence Research

{ "name": "prior_day_high_low_break_with_close_confirmation", "source": "classic breakout trading, e.g., Trading in the Zone by Mark Douglas, and general support/resistance breakout literature", "type": "entry_engine", "rule": "On a new bar, if the close is above the prior day's high for a long entry (or below prior day's low for a short entry), enter at the close with a stop at the prior day's extreme and take profit at 1.5 times the prior day's range from entry.", "pseudocode": "for each bar b:\n if close[b] > high[yesterday] and close[b] > open[b]:\n entry = close[b]\n stop = high[yesterday]\n target = entry + 1.5 * (high[yesterday] - low[yesterday])\n enter long once at next bar open, exit at stop/target\n if close[b] < low[yesterday] and close[b] < open[b]:\n entry = close[b]\n stop = low[yesterday]\n target = entry - 1.5 * (high[yesterday] - low[yesterday])\n enter short once at next bar open, exit at stop/target", "why_it_works": "A decisive close Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com