Carter-OB Volatility Expansion System

Family: breakout · Regime: high_vol · Complexity: high · Asset classes: FX, Indices, Crypto · Timeframes: H1, H4

Thesis

Market returns are non-normally distributed; significant price moves occur in explosive bursts following periods of volatility contraction. By identifying an institutional 'Order Block' (accumulation/distribution) that coincides with a volatility squeeze and is supported by smoothed momentum (RSX) and trend (PSAR), we can enter at the inception of a volatility expansion with a statistically significant edge.

Components

• TTM Squeeze (Carter Ratio version) (regime) — Serves as the volatility regime filter; entry is only considered when the market is compressed (Squeeze On) or momentum is beginning to expand (LimeGreen/Red bars).
• Parabolic SAR (Standard) (direction) — Establishes the primary trend direction and filters out OB signals that appear counter-trend.
• Order Block & FVG Detector (entry) — Provides the specific entry trigger by identifying institutional supply/demand zones during the volatility expansion.
• Bears Power (exit) — Used to detect weakening sell-side momentum to exit shorts, or as a secondary exhaustion exit for longs when price diverges from the EMA.
• SuperTrend (risk) — Provides a volatility-adjusted trailing stop and defines the hard invalidation level for the trade.
• Corrected RSX (confirmation) — Filters out noise from the OB detector by ensuring momentum is directionally aligned with the trend and not exhausted.

Known failure conditions

• Extended periods of 'Squeeze On' without an expansion (volatility death).
• SuperTrend and Parabolic SAR frequently flipping in opposite directions (high-noise chop).
• Order Block signals appearing at the very end of a trend expansion rather than the start.

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