Corrected RSX Pullback Expansion Strategy

Family: pullback · Regime: trending · Complexity: high · Asset classes: FX, Indices, Commodities · Timeframes: H1, H4

Thesis

Price trends are rarely linear; they consist of momentum phases followed by volatility compression (Inside Bars). By using an adaptive RSX to identify the 'corrected' trend and entering only when short-term selling pressure (Bears Power) occurs within a bullish expansion, we capitalize on the resumption of momentum from a low-volatility state.

Components

• Corrected RSX (regime) — Serves as the primary trend filter; only trading in the direction of the noise-filtered momentum to avoid counter-trend traps.
• Bears Power (direction) — Identifies momentary exhaustion or 'spring' potential. By looking for short-term selling pressure within a bullish regime, we enter on local weakness.
• Inside Bars (MTF Framework) (entry) — Acts as a volatility compression trigger. The breakout of the IB signifies the resumption of the primary trend after a period of indecision.
• TSI Convergence Divergence (TSI_CD) (exit) — Used for dynamic profit taking. When the TSI histogram pivots (convergence), it signals that the trend's internal strength is waning.
• Murrey Math Line X (risk) — Provides objective structural levels (octaves) for risk management, which are less arbitrary than fixed pips or percentages.

Known failure conditions

• Prolonged ranging price action where Murrey Math levels contract and Corrected RSX fluctuates around the 50 line.
• Structural failure where price breaks the [0/8] support level during a long trade despite a bullish RSX.

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