ADR-Bulls Momentum Trend-Follower

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: Equities, Forex, Crypto · Timeframes: H1, H4, D1

Thesis

Market trends are more sustainable when the internal composition of a trend (the ratio of up-bars to down-bars) is overwhelmingly positive. By combining this internal regime filter with buying pressure (Bulls Power) and momentum acceleration (TSI_CD), we identify the 'sweet spot' of a move. Exiting via a Heiken Ashi Chandelier Exit allows the trend to breathe while protecting capital using smoothed volatility thresholds.

Components

• Advance/Decline Ratio (Bars) (regime) — Acts as the regime filter; requires a 'bullish internal structure' where more bars close positive than negative over the lookback to permit long trades.
• Bulls Power (Elder Ray) (direction) — Provides directional confirmation by ensuring buying pressure (High - EMA) is positive for longs, indicating bulls can push price above the average.
• TSI Convergence Divergence (TSI_CD) (entry) — Captures momentum acceleration. Entering on the histogram color change ensures we trade in the direction of the TSI trend relative to its signal line.
• Chandelier Exit (Heiken Ashi) (exit) — Provides a volatility-adjusted trailing stop. Heiken Ashi smoothing reduces noise, preventing premature exits during minor retracements. (Adjusted from default for stability).
• ATR SL Finder (risk) — Determines initial stop-loss placement and position sizing based on current market volatility to normalize risk per trade.

Known failure conditions

• Prolonged sideways 'sawtooth' price action where ADR_B oscillates around 1.0 frequently.
• TSI_CD provides frequent color flips without price displacement, leading to high transaction costs.
• High-impact news events that gap through the ATR-based stop loss levels.

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