Psych-Harmonic Midpoint Mean Reversion

Family: hybrid · Regime: mixed · Complexity: high · Asset classes: FX, Indices, Large-cap Equities · Timeframes: H1 house, H4 house

Thesis

Market reversals are most likely to occur when fractal price structures (Harmonics) reach completion at psychological barriers (Round Numbers), provided that immediate momentum (Stochastic) and the broader range center (Midpoint) support the shift in sentiment. Efficiency is found in the confluence of these unrelated market features.

Components

• Round Levels Zone Shading (regime) — Establishes the 'Institutional Zone' where price is expected to react due to psychological clustering.
• MIDPOINT: Rolling Midpoint (direction) — Acts as the 'value' line; ensures entry occurs when price has momentum relative to its recent range center.
• Custom Pattern Detection (Harmonic Designer) (entry) — Identifies high-probability structural exhaustion points via Fibonacci ratios.
• Chandelier Exit (exit) — Provides a volatility-adjusted trailing stop to lock in profits during the trend following the reversal.
• ATR SL Finder (risk) — Calculates dynamic stop levels to protect against volatility spikes at the pattern completion point.
• Stochastic Oscillator (ta.stoch) (confirmation) — Confirms momentum shift out of extreme zones to time the entry after the harmonic pattern forms.

Known failure conditions

• Price ignores Round Level zones entirely during high-impact news (slippage/gap).
• ZigZag pivots fail to stabilize, causing the Harmonic Designer to 'hunt' for a pattern while price trends strongly against it.
• Rolling Midpoint becomes flat in extremely low volatility, leading to Stochastic whipsaws.

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