A two-average brick crossover is not yet a trading system

The testable object is the full procedure

The archive describes a brick-sampled comparison of two eight-period simple moving averages, not a standalone indicator reading. TradersWeek editorial view: that comparison is not yet a trading system. The testable object is the full bundle of price definitions, brick sampling, brick-color confirmation, trend agreement, conflict-zone abstention, and next-brick fill, written so entry, exit, and standing aside are one mechanical procedure.

Typical price and heikin-ashi recalculated price

The illustrated procedure compares an eight-brick simple moving average of typical price with an eight-brick simple moving average of heikin-ashi recalculated prices, both computed on modified-renko bricks. Typical price is high plus low plus close divided by three. It is the input series for one of the two averages. The heikin-ashi series is haOpen plus haHigh plus haLow plus haClose divided by four. That heikin-ashi recalculated price is the input series for the comparison average.

Modified-renko bricks set the sample

The worked example is drawn on a 100-tick, one-point modified-renko series of the S&P 500, with both averages sampled on those bricks rather than on fixed-time bars. Each completed modified-renko brick is the sampling unit for both averages and for every signal.

Virtual bricks and session gaps

Virtual bricks used to fill gaps are not valid prices for entry or exit. They keep the chart continuous, but they are not usable as a trigger price or as a fill price. Regular-hours instruments typically show large session-break gaps that must remain visible if brick-based signals are to stay valid. A 24-hour series has fewer small gaps but more quiet, limited-range bricks.

Crossover, threshold, and brick direction

A modeled comparison of the two eight-period averages treats a value above 0.8 as a long or short signal. That comparison threshold is the cutoff for a crossover signal on completed bricks. A long-to-short flip is accepted only when the trigger brick closes below its open. A short-to-long flip is accepted only when the trigger brick closes above its open. A zero open-to-close range does not confirm direction. This brick-direction filter withholds a flip unless the trigger brick’s close sits on the same side of its open as the new side.

Trend agreement and the conflict zone

A 21-bar simple moving average of close is combined with the crossover state so a long or short requires both inputs to agree. That slower close-based average is the trend-agreement filter. Disagreement produces a flat conflict zone, including intervals where crossover state disagrees with brick direction or with the slower trend average. The conflict zone may be held through by repeating the prior state, or used as an early-exit condition.

Next-brick fill and the signal blocker

The mechanical fill opens a trade only at the open of the brick after the trigger. Virtual bricks remain invalid for that fill. A signal blocker is required so a running trend does not keep repeating long or short signals until the next reversal.