Bandpass-Darvas Cyclical Breakout

Family: breakout · Regime: trending · Complexity: high · Asset classes: FX, Equities, Indices · Timeframes: H1, H4

Thesis

The strategy hypothesizes that sustainable trends are preceded by specific cyclical frequencies and structural consolidations. By isolating the 'market heartbeat' via a Bandpass Filter and waiting for a Darvas Box breakout that aligns with Fisher-transformed momentum and adaptive volatility (VIDYA), we capture the highest-velocity phase of a trend while using Smart Money zones (GOM KOLA) for risk mitigation. The edge lies in filtering out non-cyclical noise that often causes false breakouts in traditional Darvas systems.

Components

• Bandpass Filter (BPF) (regime) — Acts as the primary regime filter, ensuring the strategy only enters trades when price is within a specific frequency band, filtering out both high-frequency noise and long-term secular trends.
• Solar Wind NRP (MQL5) (direction) — Provides the directional bias using a Fisher-transformed oscillator; the NRP (Non-Repainting) setting is critical to ensure signal stability.
• Darvas Boxes Modern/Classic (entry) — Detects breakouts from established consolidation ranges. The PivotStrength provides the necessary lag to confirm that a structure has indeed been broken.
• Donchian Channels (exit) — The classic Turtle exit; provides a trailing exit mechanism that allows the trade to breathe during trends while cutting it when the trend-structure fails.
• GOM KOLA SIDO — Full Integration (risk) — Determines the dynamic stop-loss using KOLA Zones and Supertrend levels, providing a structural risk buffer.
• Momentum Oscillator (confirmation) — Confirms the velocity of the breakout; ensures that price is actually accelerating in the direction of the trade rather than just drifting out of the box.
• Variable Index Dynamic Average (VIDYA) (volatility_filter) — Serves as an adaptive volatility filter; price must be on the 'correct' side of the VIDYA to ensure volatility is expanding in our favor.

Known failure conditions

• Prolonged period of 'Brownian Motion' where BPF produces flat/neutral signals across all timeframes.
• Consecutive Darvas Box breakouts that immediately reverse (false breakouts) indicating a 'Ranging' regime that the BPF failed to filter.
• Solar Wind NRP oscillations that occur faster than the Darvas PivotStrength can react.

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