LinReg Wave-Break Momentum Hybrid

Family: trend_following · Regime: trending · Complexity: high · Asset classes: FX, Indices, Equities · Timeframes: H1, H4

Thesis

Market breakouts are most likely to sustain when they occur in the direction of the linear trend slope, are supported by volume-profile POC reclaims, and are confirmed by volatility expansion. By combining these, we filter out the majority of 'fake' breakouts that lack institutional volume support (WaveTrend) or trend-slope alignment (LinReg).

Components

• Linear Regression (LINREG) (regime) — Determines the primary trend regime via the sign of the slope; only long trades are permitted when the slope is positive.
• WaveTrend v3 [WavesUnchained] (direction) — Identifies institutional accumulation/distribution via the Alignment Score and CCI-based momentum.
• Stochastic Oscillator (entry) — The tactical entry trigger; used to time entries when the larger regime and structural breakout are already aligned.
• Donchian Channels (exit) — Used as a trailing stop and dynamic exit point based on the most recent 20-period price extremes.
• iExposure (risk) — Monitors real-time net symbol exposure to prevent over-leveraging and manage weighted average exit prices.
• TradeBreakOut (TBO) (confirmation) — Provides structural confirmation that price has physically moved beyond recent high/low percentage thresholds.
• Traders Dynamic Index (TDI) (volatility_filter) — Filters for volatility expansion; ensures price is moving with momentum relative to historical volatility bands.

Known failure conditions

• Slope of Linear Regression remains flat (near zero) for more than 50 bars, indicating a non-trending regime.
• Donchian Channel width shrinks by 70% from its 100-bar average, signifying extreme compression.
• WaveTrend Alignment Score oscillates between -1 and 1 repeatedly, suggesting conflicting multi-timeframe signals.

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