Macro-Breadth Cyclical Trend Hypothesis

Family: trend_following · Regime: trending · Complexity: high · Asset classes: Equities, Forex, Crypto · Timeframes: H4, D1

Thesis

Sustainable market trends are characterized by 'internal breadth,' where the majority of individual bars close in the direction of the trend (captured by ADR_B). By combining this internal momentum with a macro risk filter and a cyclical oscillator (STC), the strategy identifies high-conviction entries during structural trend shifts (HiLo) while avoiding the exhaustion phase of the move. The edge exists because price-action alone often masks weak underlying participation; requiring a specific ratio of bullish/bearish bar closes filters out speculative 'stop-hunts' and news-flickers.

Components

• Advance/Decline Ratio (Bars) (regime) — Identifies short-term regime strength by ensuring the internal structure of the bars (breadth) supports the price movement, filtering out low-conviction price spikes.
• HiLo Activator 02 (direction) — Establishes the primary trend direction and provides structural support/resistance levels to ensure we are trading with the path of least resistance.
• Qualitative Quantitative Estimation (QQE) (entry) — The trigger mechanism; uses the crossover of smoothed RSI against its trailing volatility band to capture momentum shifts.
• Custom 004 Liquidity Map with Drawings (exit) — Provides objective price targets based on 20-period swing highs/lows where liquidity is expected to reside.
• ATR Stop Loss Finder (risk) — Calculates a dynamic, volatility-adjusted stop loss to allow the trade breathing room while protecting capital.
• Schaff Trend Cycle (STC) (confirmation) — Acts as a cyclical timing filter to ensure the entry is not made during the exhaustive phase of a trend cycle (avoiding STC plateaus).
• Macro Risk Dashboard v8.2 (volatility_filter) — Prevails as a gatekeeper to ensure the strategy only operates when global liquidity and credit stress are within manageable levels, avoiding 'black swan' volatility.

Known failure conditions

• Strategy underperforms in low-volatility 'drift' markets where ATR stops are tight but liquidity targets are distant.
• Macro Risk Dashboard data lag results in entries during the onset of systemic liquidity crunches.
• ADR_B remains near 1.0 (equilibrium) for extended periods, causing no-trade zones during slow trends.

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