JB-Normality OrderBlock Breakout

Family: breakout · Regime: high_vol · Complexity: high · Asset classes: FX, Indices, Commodities · Timeframes: H1, H4

Thesis

Institutional orders create 'shocks' that force price distributions into a non-normal state. By identifying these shocks using the Jarque-Bera test and confirming the direction with Linear Regression and Order Blocks, we can capture the meat of a breakout after it clears significant Daily MTF levels.

Components

• Jarque-Bera Test (JB) (regime) — Identifies non-normal return distributions; high values suggest price is moving out of a random-walk range into a fat-tailed trend or high-volatility event.
• Linear Regression (LINREG) (direction) — Determines the primary trend bias via the slope of the least-squares fit line.
• Donchian Channels (DC) (entry) — Provides mechanical breakout levels; entry occurs when price violates the established high/low boundary during high JB regimes.
• Stochastic Oscillator (exit) — Signals momentum exhaustion to trigger exits before a full trend reversal occurs.
• FakeCandle (risk) — Used to filter out price noise and determine risk placement based on NNFX structure (SL at candle extremes).
• OrderBlock FVG Detector (confirmation) — Confirms that the breakout is supported by institutional liquidity footprints (order blocks or fair value gaps).
• Daily High Low MTF (volatility_filter) — Ensures the breakout has cleared significant higher-timeframe psychological levels.

Known failure conditions

• Jarque-Bera remains below 5.991 for extended periods, leading to no trade entries during slow-grind trends.
• Frequent 'FakeCandle' signals in low-liquidity environments leading to premature stop-outs.
• Order blocks being mitigated immediately after formation, resulting in 'trapped' breakout entries.

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