Rank-Power Correlation System

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

Thesis

Trend persistence is best captured when dominance frequency (TPI) and price velocity (MOM) align, but entry timing must be filtered by ordinal rank correlation (RCI) to avoid entering at the peak of a short-term exhaustion cycle. By using Murrey Math market geometry for targets, the strategy exits where liquidity typically clusters, while the Heiken-Ashi Chandelier variant provides a smoothed volatility floor to protect against 'fake-out' reversals.

Components

• Total Power Indicator (regime) — Determines the dominant regime (Bullish/Bearish) based on the frequency of power dominance over 45 periods, filtering for high-conviction trends.
• Momentum Oscillator (direction) — Confirms price velocity aligns with the regime, ensuring we do not enter on exhaustive 'exhaustion' moves but rather on active price expansion.
• Rank Correlation Index (entry) — Identifies cyclical turning points using Spearman's rank correlation to time entries when short-term cycles realign with the broader regime.
• Murrey Math Line X (exit) — Provides objective, fractally-derived price targets (4/8, 6/8, 8/8) based on market geometry rather than arbitrary percentages.
• Chandelier Exit Heiken Ashi Variant (risk) — Calculates a volatility-adjusted trailing stop based on smoothed HA extremes to protect capital and lock in gains. Note: ATR Period adjusted from 1 to 14 for stability.

Known failure conditions

• Total Power Indicator fails to cross the 20% threshold for extended periods (persistent low-volatility range).
• Price oscillates around the Murrey Math 4/8 (Pivot) level without reaching any outer octaves.
• RCI remains 'pinned' at +/- 100 for over 10 bars, indicating a momentum blow-off that precedes a sharp reversal.

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