HP-Filtered Cyclical Volume Trend

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

Thesis

Market trends move in cyclical waves where price temporarily deviates from the trend-line due to short-term imbalance; an edge exists when a cyclical trough (DPO) aligns with institutional volume accumulation (WAD) and a confirmed structural shift (ADX) within a macro-regime. This hypothesis assumes that volume-weighted accumulation precedes price breakout from cyclical lows.

Components

MA Channel (Framework Version) (regime) — Establishes the primary trend regime; trades are only taken in the direction of the trend counter (Long > 0, Short < 0).
ADX Crossing INGM (direction) — Provides the directional bias; utilizes the prompt-specified 'inverted' logic where +DI < -DI represents a bullish shift.
Detrended Price Oscillator (DPO) (entry) — Identifies cyclical turning points by finding local oversold/overbought conditions within the filtered trend.
ZigZag Color (Classic) (exit) — Provides structural exit points based on confirmed price reversals to capture the majority of a swing leg.
Session Range (High/Low/Mid) (risk) — Defines the risk floor/ceiling for stop-loss placement based on intraday volatility boundaries.
Williams Accumulation/Distribution (WAD) (confirmation) — Confirms that price movement is supported by actual buying/selling pressure (volume-weighted).
Hodrick-Prescott Filter (HP) (volatility_filter) — Acts as a volatility filter by ensuring price is on the correct side of the smoothed macroeconomic trend component.

Known failure conditions

Protracted sideways price action where MA Channel narrows significantly and ADX whipsaws.
Low volume environments where WAD produces stagnant, flat readings.
Session range being excessively wide (e.g., news events), leading to poor R:R.

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