Fourier-LSTM Harmonic Trend System

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

Thesis

Market trends are not linear but composed of cyclical oscillations. By using a Fourier Series to identify harmonic turns within a regime validated by machine-learning-optimized volatility filters, a trader can enter trends with lower lag and higher precision than standard moving average crossovers. The edge exists because standard trend-following tools lag during cyclical pullbacks, whereas Fourier analysis anticipates the return to the mean trend.

Components

• HiLo Activator 02 (regime) — Establishes the macro trend regime; ensures we are only trading in the direction of structural support/resistance levels.
• Heiken Ashi (direction) — Smooths price noise to confirm that the immediate candle sentiment aligns with the macro regime.
• Ehlers Fourier Series Indicator (FSI) (entry) — Identifies the cyclical turning point within the trend by reconstructing the first three harmonics.
• Custom 004 Liquidity Map with Drawings (exit) — Uses 20-period peak/trough liquidity levels as logical take-profit targets where mean reversion is likely.
• Equity Line Projection (risk) — Calculates position size and dynamic stop levels by projecting account equity impact before trade execution.
• Bulls Power (Elder Ray) (confirmation) — Confirms that the high of the current bar exceeds the EMA, validating buying pressure during the cycle turn.
• ML SuperTrend (Ultimate) - Auto-Optimized AI with LSTM (volatility_filter) — Acts as a volatility gatekeeper; the LSTM-optimized factor prevents entry during regime exhaustion or low-volatility noise.

Known failure conditions

• ML SuperTrend 'base_fact' remains static for long periods, suggesting the LSTM has failed to adapt to volatility shifts.
• FSI zero-crossings occur too frequently (whipsaw) during a declared HiLo trend.
• Liquidity map levels are breached with high momentum without reversal, indicating a trend runaway rather than a cycle.

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