HP-Ichimoku Cyclical Trend Navigator

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

Thesis

Market trends exhibit both a long-term economic growth component and a medium-term equilibrium. By isolating the 'cyclical noise' from the HP-filtered trend and waiting for Ehlers DSP momentum to realign with the Ichimoku cloud's structural bias, we catch high-probability trend continuations after pullbacks. The risk is minimized by using MTF structural lows to ensure we are not stopped out by intraday noise.

Components

• Hodrick-Prescott Filter (HP) (regime) — Identifies the macro trend regime; we only trade in the direction of the HP trend and when the HP cycle is extended.
• Ichimoku Kinko Hyo (direction) — Provides the directional filter; price must be on the correct side of the Kumo cloud to confirm trend alignment.
• Ehlers Detrended Synthetic Price (DSP) (entry) — Used as a timing trigger to enter on cyclical pullbacks within the established trend.
• Chandelier Exit (exit) — Provides a dynamic trailing stop based on volatility to capture trend extension while protecting gains.
• Daily High Low MTF (risk) — Used to define the Stop Loss level at the previous day's extreme and determine position size based on risk-to-level.
• Standard Deviation (volatility_filter) — Filters out low-volatility environments (squeeze) where the HP filter and Ichimoku are prone to whipsaws.

Known failure conditions

• Prolonged sideways markets where HP Cycle and DSP oscillate without price progression.
• Breakdown of the cyclical relationship between current timeframe and Daily extremes.
• High-frequency news events causing spikes through Chandelier trailing stops before trend resumption.

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