CVD-ASH Momentum Breakout

Family: breakout · Regime: trending · Complexity: high · Asset classes: Futures, Equities (High Volume), Crypto (Exchange Traded) · Timeframes: M5, M15, H1

Thesis

Sustained price movements are driven by an imbalance of aggressive market orders (CVD) occurring at volatility extremes (HTF breakouts). By identifying these periods and entering on a smoothed momentum signal (ASH), we can capture the 'fat tails' of market distributions using a Parabolic SAR to lock in profits during acceleration.

Components

• Indicator Sample (Template) (regime) — Acts as a 'Warm-up' filter to ensure the terminal has loaded sufficient historical data (iBars > 100) before allowing execution, preventing errors in ASH and ZigZag calculations.
• Buddha Money Flow (direction) — Provides the directional bias by identifying whether aggressive buyers or sellers are in control via Cumulative Volume Delta (CVD).
• Absolute Strength Histogram (ASH) (entry) — Triggers the entry when the smoothed bullish component exceeds the bearish component (or vice versa), capturing momentum shifts within the established volume bias.
• ZigZag Color (Classic) (exit) — Identifies major structural reversals; used as a secondary 'take profit' or logical exit when a swing high/low is confirmed in the opposite direction.
• Parabolic SAR (risk) — Provides a dynamic, volatility-adjusted trailing stop-loss and the primary exit signal upon a trend flip.
• GFRMa Pivot HTF3 Dashboard (volatility_filter) — Ensures price is in a high-momentum breakout state (Price > iHSLhighs) and RSI is above 50 before entry, filtering out low-volatility churn.

Known failure conditions

• CVD shows persistent divergence from price (Price up, CVD down) for more than 3 consecutive bars.
• Price remains trapped between GFRMa High/Low pivots for extended periods, triggering ASH whipsaws.
• ZigZag legs failing to extend beyond 1.5x the average range, indicating a range-bound market.

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