This article turns a visual “recompression” pattern into explicit rules and reports results for a U.S. large-cap sample from 2021–2025. The reported hit rate is conditional on that construction and should not be read as a live-trading promise. The key question is whether the result survives an untouched period, realistic costs and alternative parameter choices. The 72.4% figure also depends on the exact universe, event count, target and stop definitions, look-ahead controls and confidence interval; data-snooping, delistings, slippage and regime change remain failure risks.
They are sample-dependent patterns born from how institutions accumulate, retail chases momentum, and liquidity clusters under pressure.
When you recognize them, you stop searching for prediction — and start trading structure. The pattern works when you understand why it forms, not just how to draw it.
Today’s post focuses on one recurring setup I keep seeing across equities, crypto, and index futures.