Gradient Volume-Cycle Trend Hybrid

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: Equities, Forex, Crypto · Timeframes: H1, H4, D1

Thesis

Sustainable trends are driven by institutional volume and exhibit periodic short-term mean-reversion cycles. By identifying a stable HTF trend (200 SMA Slope) and waiting for a short-term price cycle to reach an 'oversold' state within that trend (DPO < 0), we can enter when volume-weighted momentum (KVO) confirms the resumption of the primary move. The volume-weighted background opacity serves as a proxy for 'trend health,' suggesting that trades taken during moderate volume (higher opacity) are less likely to be exhaustion moves than those taken during volume extremes.

Components

• 200-Day Trend Background (Smoothed Volume Gradient) (regime) — Defines the primary trend direction via SMA slope and filters out volume exhaustion states using the opacity gradient.
• Detrended Price Oscillator (DPO) (direction) — Identifies short-term price cycles within the broader trend, allowing for entries on pullbacks (oversold/overbought) rather than chasing extensions.
• Klinger Volume Oscillator (KVO) (entry) — Acts as the final execution trigger, ensuring that volume flow confirms the reversal of a short-term cycle in the direction of the HTF trend.
• Average True Range (NNFX Version) (exit) — Provides a volatility-adjusted basis for setting stop loss and take profit distances.
• Risk Reward Indicator Tool (risk) — Standardizes the risk per trade and ensures a positive expectancy through fixed reward-to-risk ratios.

Known failure conditions

• Market enters a low-volatility 'flat' SMA state for extended periods, triggering the neutral zone constantly.
• Volume spikes significantly without price movement, causing the Volume Gradient to wash out the trend signal.
• Asset exhibits 'mean-reverting' behavior where 200-day trends are frequently broken by deep corrections.

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