AGC Adaptive Zero-Lag Trend Hybrid
Family: hybrid · Regime: trending · Complexity: high · Asset classes: Equities, Forex, Crypto · Timeframes: 1H, 4H, Daily
Thesis
The strategy hypothesizes that market 'bursts' are most tradeable when an adaptive oscillator (AGC) shows high cycle amplitude and volume (OBV) confirms the direction. By using a zero-lag EMA (MCNMA), we can capture the meat of the move before standard indicators react, while using structural pivots (Fractals) for objective, if slightly lagged, risk management.
Components
- Ehlers Automatic Gain Control (AGC) (regime) — Acts as the regime filter by normalizing price oscillations; ensures entries only occur when the amplitude of the roofing-filtered price cycle is sufficient to overcome noise.
- Supported indicator max boxes count (direction) — Provides the raw price vector (y=close) used to determine the directional bias relative to the zero-lag moving average.
- McNicholl EMA (MCNMA) (entry) — A zero-lag entry trigger that reacts faster than standard EMAs to price reversals by using six cascaded stages.
- Stochastic Oscillator (exit) — Identifies overextended momentum states for mean-reversion exits before the primary trend exhausts.
- Williams Fractals (risk) — Provides hard structural levels for stop-loss placement and risk-of-ruin position sizing, accounting for the 2-bar confirmation lag.
- On-Balance Volume (OBV) (confirmation) — Confirms that price movement is supported by cumulative volume flow, filtering out 'hollow' breakouts.
Known failure conditions
- The AGC signal stays pinned to +/-1 for extended periods, suggesting the roofing filter parameters are mismatched to the asset's cycle.
- Price repeatedly triggers MCNMA crosses in a tight range without hitting Stochastic exit levels, leading to 'death by a thousand stops'.
- Volume (OBV) stays flat while price trends, indicating the strategy is trading against the primary liquidity flow.
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