Linear-Structural Reversion Hybrid

Family: hybrid · Regime: trending · Complexity: high · Asset classes: FX, Equities, Crypto · Timeframes: H1, H4, D1

Thesis

The 'Linear-Structural Exhaustion' hypothesis posits that price overshoots of linear regression channels (Ghost) are non-random when they conclude in a validated Head & Shoulders pattern. The edge exists because regression measures the 'average' path, while HS patterns capture the behavioral transition from trend-persistence to trend-failure. By confirming this transition with a momentum normalization (Fisher) and a bias in the prediction error (ME), we filter for high-probability reversals where institutional 'smart money' is likely re-positioning at structural levels (PiPi).

Components

• Ghost Channels [mph1nance] (regime) — Defines the statistical boundaries of the current trend; entry occurs when price tests the rails (overshoot) while R2 validates the channel's reliability.
• Fisher Transform (EarnForex) (direction) — Normalizes price distribution to identify momentum pivot points following a channel touch.
• HS Indicator (Head & Shoulders) (entry) — Provides the structural 'trigger' by identifying exhaustion patterns (H&S/iH&S) near the regression rails.
• MultiKAMA (TyphooN) (exit) — Adapts to volatility to provide a trailing exit that tightens during high-efficiency moves and loosens during noise.
• PiPi (Price Infrastructure & Position Interface) (risk) — Uses structural 'Levels' and Fibonacci retracements to define hard stop-loss coordinates and calculate risk-adjusted position sizes.
• Mean Error (ME) (confirmation) — Confirms that the directional error bias has shifted in favor of the new trend, ensuring the move isn't just noise.

Known failure conditions

• Ghost Channel R2 falls below 0.3, indicating a non-linear/chaotic market structure.
• Price remains pinned to a rail for >10 bars with Urgency Score >90 (parabolic blow-off).
• Fisher Transform oscillates rapidly within +/- 0.5 (low momentum chop).

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