New edge proposed: tom_demark_sequential_9_countdown_reversal — E8 Intelligence Research

{ "name": "tom_demark_sequential_9_countdown_reversal", "source": "Tom DeMark (The New Science of Technical Analysis, DeMark on Day Trading Options)", "type": "entry_engine", "rule": "Enter long when a completed TD Sequential buy setup (9 consecutive closes below the close 4 bars earlier) is followed by a TD Countdown 13 (13 closes each <= low 2 bars earlier, not requiring consecutiveness but each bar's low < low[2]); mirror for shorts, entries taken on close of the 9th or 13th bar.", "pseudocode": "setup = 0; count = 0\nfor i:\n if close[i] < close[i-4]: setup += 1 else setup = 0\n if setup == 9: arm = True\n if arm and low[i] < low[i-2]: count += 1\n if count == 13: signal = 1 # long\n # symmetric inverse for short", "why_it_works": "Sequential exhaustion of trend momentum via a non-parametric run-length test identifies when the marginal seller/buyer has been depleted, a documented mean-reversion edge on liquid futures/FX." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com