Asia Range A/D Cycle Exhaustion

Family: hybrid · Regime: ranging · Complexity: medium · Asset classes: Forex (Majors), Gold (XAUUSD) · Timeframes: M15, H1

Thesis

Institutional liquidity is often sought outside the 'quiet' Asian session range. When price breaks these bounds but the A/D Index shows divergence (accumulation/distribution), it identifies a 'trap' or liquidity grab. By filtering these signals through an HP-derived cycle component, we enter high-probability reversals as the market returns to its session-neutral trend.

Components

• Forex Asia Range Box Lite (regime) — Defines the 'fair value' liquidity zone. Entries are only sought when price interacts with or extends beyond these boundaries during London/NY sessions.
• Accumulation/Distribution (A/D) Index (direction) — Provides the 'true' volume-weighted direction. Used as the input source for the divergence engine to detect institutional absorption.
• Divergence Base Template (entry) — Identifies momentum exhaustion. A regular bullish divergence on the A/D index indicates price is falling on low volume/buying pressure, signaling a reversal.
• MACD (exit) — Used to capture the meat of the reversal and exit when momentum fades or crosses the signal line.
• Roshaneforde Pivot Levels (risk) — Uses candle-reversal patterns to identify structural support/resistance for hard stop-loss placement and position sizing.
• Hodrick-Prescott Filter (HP) (volatility_filter) — Acts as a 'cycle filter'; trades are only taken if the price (cycle component) is significantly stretched from the HP trend.

Known failure conditions

• Price remains within the Asia Range for the entire London session (low volatility).
• A/D Index stays flat while price trends strongly, indicating the volume data is disconnected from price action (common in low-liquidity pairs).
• MACD exit triggers immediately after entry due to high volatility whipsaws.

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