Murrey-NET Fractal Correlation Pullback

Family: trend_following · Regime: trending · Complexity: high · Asset classes: FX, Indices, Commodities · Timeframes: H1, H4, D1

Thesis

Trend persistence is best captured when statistical correlation (NET) and momentum (ASH) align, provided entry is timed during temporary volatility contractions (ADX pullbacks) within central market structure octaves (Murrey 3/8-5/8). The 'inverted' ADX signal serves as a contrarian timing mechanism to enter a dominant trend at a local discount.

Components

• Murrey Math Line X (regime) — Defines the 'Trading Range' (3/8 to 5/8 levels). Avoids entries at extreme overbought/oversold octaves where mean reversion risk is highest.
• Ehlers Noise Elimination Technology (NET) (direction) — Filters market noise using Kendall Tau correlation to ensure a statistically significant trend is present before entry.
• ADX Crossing INGM (entry) — Used as a 'counter-trend' trigger within a trend. Due to its inverted logic (Buy on +DI < -DI), it identifies temporary momentum pauses or pullbacks for entry.
• HiLo Activator 02 (exit) — Provides a dynamic trend-following exit that tightens during volatile expansions.
• Average True Range (NNFX) (risk) — Determines initial stop-loss distance and position size based on current market volatility.
• Absolute Strength Histogram (ASH) (confirmation) — Provides secondary momentum confirmation to ensure the bulls (for long) or bears (for short) have absolute dominance.

Known failure conditions

• Price oscillates continuously around the 4/8 Murrey Pivot, causing NET to flip-flop near zero.
• Discrete Murrey level shifts occur frequently due to high volatility, invalidating the range boundaries.
• Historical ADX Crossing logic inversion leads to entries during sustained counter-trend collapses rather than pullbacks.

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