#30 — RACS reversal-accumulator IC study

2026-05-19 (Session 062)

Verdict: mixed · 🟡 mixed — statistically real, economically marginal

Price levels with dense time-decayed reversal history are genuinely predictive of M5 direction (72% of cells significant, counter-trend), but the decile spread is roughly 1 pip — below the spread toll.

Hypothesis — what it tests

Whether price levels with dense, time-decayed past-reversal history (an S/R accumulator) carry predictive information for M5 direction.

Description

RACS (Reversal Accumulator Signal) tests a classic support/resistance intuition rigorously: do price levels where many past reversals occurred predict future direction? The signal detects 3-bar local extrema on H1 or H4 bars (causally, confirmed only at the confirming bar's close), maps them into 5-pip price bins, and builds a sign-weighted, time-decayed histogram (+1 for tops/resistance, −1 for bottoms/support). The trading signal is the Z-score of the histogram at the current price. Across 12 pairs x 8 horizons, 69/96 H1 cells and 57/96 H4 cells passed |t|>2 — vastly above the 5% chance baseline, with dominant counter-trend sign — but IC magnitudes were only −0.003 to −0.032 and the top-vs-bottom decile spread was ~0.5-1.5 pips, below spread. Verdict: real signal, unusable standalone; best imagined use was as a directional filter on FIFO-Trends entries.

Key result

H1: 69/96 cells |t|>2 (71.9% vs 5% baseline), top t=−11.5; H4: 57/96 (59.4%); IC −0.003 to −0.032; D1-vs-D10 decile spread ≈0.5–1.5 pips < spread

Indicators

RACS reversal accumulator (time-decayed S/R histogram)3-bar swing extremaZ-score5-pip P&F-style price binning

Algorithms

information-coefficient (IC) studydecile analysist-stat significance gating

Code

research/experiments/reversal_acc/backtest_racs.py research/experiments/reversal_acc/results_racs.csv

Interactive version (search, filters, figures): the experiment explorer.

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This page is one experiment from the audited record behind the book The Edge That Wasn't — get the book · about the project.