ALMA-Gaussian High-Conviction Pullback

Family: pullback · Regime: trending · Complexity: high · Asset classes: Forex, Indices, Equities · Timeframes: H1, H4

Thesis

Market trends move in waves of expansion and contraction; by using ALMA Gaussian smoothing to identify high-probability expansion regimes, we can enter during 'volatility dips' (Bollinger touches) when they are supported by volume and price action stability (MA-Candles), betting that institutional order flow will defend the trend.

Components

• ALMA with Floating Levels (regime) — Acts as the primary regime filter; price must be above the upper floating level to authorize longs, ensuring we are in a non-exhausted bullish expansion.
• MACD & OSMA Cloud Hybrid (direction) — Provides the trend-momentum bias. Only trade in the direction of the MACD Cloud (Main > Signal) and green OsMA histogram.
• Bollinger Bands (entry) — The entry trigger is a mean-reversion 'dip' (touching the lower band) within an established uptrend, or a volatility squeeze breakout.
• Chandelier Exit (exit) — Provides a trailing profit-taking mechanism that adapts to the Highest High of the move.
• Parabolic SAR (risk) — Hard stop-loss and position sizing reference; identifies the immediate point of trend failure for risk management.
• Volume Moving Average (VOLMA) (confirmation) — Validates the entry; entry volume must exceed the 5-period average to confirm institutional participation in the move.
• MA-Candlesticks (volatility_filter) — Filters for 'clean' volatility. We require the MA-Candle body (C>O) to be bullish for longs to avoid entries during noisy price action.

Known failure conditions

• The ALMA floating levels remain static or narrow significantly, indicating a dead market where mean reversion fails.
• Consecutive stop-outs via PSAR while MACD Cloud remains in trend, suggesting the trend is too shallow/noisy for volatility-based entries.

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