On Sunday I published a rejection ledger — all fourteen names
that failed the KISS filter, with the specific number that
killed each one.
One of them was OII. Two numbers against it: RSI at 65.23,
above the 65 ceiling. And an entry-to-stop distance of 8.28%
against a volatility budget of 7.62%.
This morning it passes.
Nothing about the system changed. No threshold was widened,
no stop was nudged, no exception was made. Here is what
actually happened, because the mechanism is the lesson.
RSI came down on its own. Three sessions of sideways action
cooled a stretched oscillator back into the band. That is
what consolidation does — it lets an extended name become
un-extended without giving back price.
The risk number is the more interesting half. On Sunday there
was no defined horizontal structure on the chart, which meant
the only legitimate place to anchor a stop was below the 20-day
average — a long way from where price was trading. Four
sessions later there IS a structure: a rim, a floor, a base.
The anchor moved closer to price because the chart built
something for it to hold onto.
The distance did not shrink because I decided to accept more
risk. It shrank because the stock did the work.
WHY THIS MATTERS MORE THAN THE TRADE
Six of the fourteen names in Sunday’s ledger failed on the
same indicator. Every one of them had gapped or run hard in
early August and then gone sideways. That pattern compresses
MACD below its signal line, and the filter says no.
I wrote at the time that the filter was not broken, it was
early. OII is the first confirmation of that.
The temptation in a week like this is to look at a chart you
like, notice it misses one filter by a small margin, and find
a reason. Move the stop up a dollar. Call the RSI “basically
in range.” Decide the sector strength makes up for it.
Every one of those is a number invented to justify a trade you
already wanted. The filter stops being a filter the moment it
can be satisfied by an argument.
The alternative is boring and it works: write the rejection
down, note the exact number that failed, and check it again
in a few days. Some of them come back. Most do not. The ones
that come back arrive with better structure than they had the
first time, because the market spent those sessions building
it.
You do not have to catch a setup the week you first notice it.
You have to be there with the same rules when it is ready.
Full levels, sizing and the four execution scenarios went to
paid subscribers this morning at kisstrading.uk.
Trade Tight · Think in R · Focus on Process
— Radu / KISS Trading
⚠️ Educational only. Not financial advice. Always DYOR.