Alligator-Scanner Cyclical Momentum Strategy
Family: trend_following · Regime: trending · Complexity: medium · Asset classes: Forex, Equities, Indices · Timeframes: H1, H4
Thesis
The strategy exploits the behavioral tendency of markets to trend on high volume after a period of consolidation. By using the Alligator to identify the start of a trend and the Hybrid Scanner to confirm volume participation, we filter for high-conviction moves. The unique edge comes from using the Detrended Synthetic Price (DSP) as an exit; by stripping the trend away, the DSP identifies the 'overbought' part of a cycle within that trend, allowing the trader to exit before the inevitable retracement (mean reversion to the Alligator's 'teeth').
Components
- Bill Williams Alligator (regime) — Provides the primary trend filter (sleeping vs. eating) to ensure trades are only taken during active trending regimes.
- Custom 006 Hybrid Table Scanner (direction) — Confirms the trend direction via EMA alignment and ensures sufficient liquidity/participation via volume spikes.
- MACD (entry) — Triggers the entry on momentum shifts (signal cross) once the regime and direction are established.
- Ehlers Detrended Synthetic Price (DSP) (exit) — Identifies cycle exhaustion by removing the trend component, allowing for exits before a full trend reversal.
- Session Range (High/Low/Mid) (risk) — Provides structural price levels (High/Low) for stop-loss placement and position sizing relative to daily volatility.
- Bollinger bands / Connectable [Azullian] (volatility_filter) — Acts as a mean-reversion filter to prevent entering at the extreme 'climax' of a move (riding the bands).
Known failure conditions
- Trend persistence without cyclical oscillation (DSP fails to cross zero during parabolic moves)
- Low volume environments where the Hybrid Scanner stays below a score of 1 indefinitely
- Expansion of session ranges during high-impact news causing stops to be excessively wide/unfilled.
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