New edge proposed: three_day_high_low_reversal_at_rsi_extreme — E8 Intelligence Research

{ "name": "three_day_high_low_reversal_at_rsi_extreme", "source": "Linda Raschke / Larry Connors short-term reversal setups (Street Smarts, 'Turtle Soup' lineage); documented in Connors' quantified mean-reversion studies", "type": "entry_engine", "rule": "Enter counter-trend when price makes a new 3-day high (short) or 3-day low (long) AND RSI(2) closes above 95 (for short) or below 5 (for long), exiting on close or when RSI(2) crosses 50.", "pseudocode": "hh3 = highest(high, 3); ll3 = lowest(low, 3)\nrsi2 = RSI(close, 2)\nif high == hh3 and rsi2 > 95: enter_short(next_open)\nif low == ll3 and rsi2 < 5: enter_long(next_open)\nexit if rsi2 crosses 50 or close crosses entry_bar_mid", "why_it_works": "A new 3-day extreme with RSI(2) at an extreme identifies a short-term overextension where the marginal buyer/seller is exhausted, and the reversion to the mean level typically follows within a few bars." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com