Alligator-HA Momentum Breakout

Family: trend_following · Regime: trending · Complexity: high · Asset classes: Commodities (XAU/USD), FX Major Pairs · Timeframes: M15 (Execution), H1 (Structure)

Thesis

The hypothesis is that trend continuation is most probable when a market exits a period of structural contraction (Inside Bar) with rising volume and momentum, while a macro-trend (Alligator) is already established. By using Heiken Ashi-based volatility for trailing stops, we account for the smoothing effects of the trend-following indicators, allowing for tighter risk management than standard ATR-based stops in volatile assets like Gold.

Components

• Bill Williams Alligator (regime) — Establishes the macro-trend regime; we only trade when the 'mouth is open' to avoid ranging markets.
• Heiken Ashi (direction) — Filters noise and provides a smoothed directional bias for entries.
• Restu Kaioh Scalping Indicator (entry) — Provides the final momentum trigger by identifying an overbought/oversold state in the direction of the trend.
• ATR Heiken Ashi (exit) — Used for a secondary exit condition if volatility dries up (ATR-HA < Threshold).
• Chandelier Exit Heiken Ashi Variant (risk) — Sets dynamic trailing stops based on HA-smoothed volatility to protect profits.
• Inside Bars (MTF Framework) (confirmation) — Signals market contraction and structural compression before a momentum breakout.
• Volume Moving Average (VOLMA) (volatility_filter) — Ensures the momentum move is backed by rising tick volume, reducing the risk of low-liquidity spikes.

Known failure conditions

• Strategy fails in 'sleeping' Alligator regimes where lines are intertwined for > 50 bars.
• Hypothesis invalidated if win rate on XAU/USD drops below 40% over 100 trades during high-volume sessions.

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