Timed breakout rules after a nested-bar contraction

A setup, not an entry

The archive treats a nested-bar-contraction as a setup rather than a trade. The procedure freezes the oldest bar as the only reference range, accepts the finished geometry only when the latest midpoint sits in a stated central band, and waits for a later break of that frozen range before any entry is counted. The same instance is then retired after one fill or after a timeout.

How the contraction is defined

A nested-bar-contraction is a three-bar sequence in which each later bar's high and low sit inside the high and low of the bar immediately before it. The latest high and low sit inside the prior bar, and that prior bar sits inside the bar two periods earlier.

The oldest bar in that sequence is the base-bar. Its high and low become the frozen reference range for later confirmation.

Accepting the apex

Acceptance also requires the apex, the midpoint of the latest bar, to fall inside a symmetry-band of the base-bar range. That band is the central fraction of the oldest bar. One worksheet encodes the fraction as 0.28 and another as 0.12.

The apex is used only to accept or reject the completed contraction. It does not place the order.

The later break is the signal

A long signal is not the pattern print itself. It is a later close through the frozen high of the base-bar. A short signal is a later close through its frozen low.

One fill or a timeout

One encoding keeps the breakout eligible for 25 later bars. If that validity-window expires unused, the signal is withheld.

The same contraction is allowed to open only one position. The one-use-rule counts the first valid cross of the frozen base and ignores later crosses of that instance.

What happens after a fill

After a fill, the same one-position procedure can reverse on the opposite base break. It can also exit on close when price is 2 beyond entry, 2.5 beyond the best price, or more than 5 beyond entry.

A later score, not an order

A separate worksheet applies a forward-horizon-score. It takes the close 30 bars later minus the pattern close, then records how often the pattern appears, how often that later close is higher, and the maximum, minimum, and mean of those point changes. That tally is used to count events rather than to place an order.

A regime label around the same geometry

A regime-filter can sit around the same geometry without entering the contraction test. A 5-bar versus 20-bar simple average of the close is attached as a bullish or bearish regime label. It labels the surrounding trend and does not define the pattern itself.