Recursive Weekly Expansion Hypothesis

Family: trend_following · Regime: trending · Complexity: high · Asset classes: FX majors, Equity Indices · Timeframes: H1

Thesis

Market liquidity is often gathered at the start of the week (Monday), creating an expansion phase Tuesday-Thursday. By combining ICT liquidity levels (SNAP) with a high-order recursive trend filter (Recursive MA), we can capture the core 'expansion' move of the weekly cycle when momentum (RSI) is confirmed and volatility (MultiKAMA) supports the move.

Components

• Color Candles Daily (regime) — Filters for mid-week expansion phases (Tues-Thurs) where institutional volume is typically highest, avoiding Monday noise and Friday profit-taking.
• SNAP HTF_LTF Indicator (direction) — Provides the bias based on institutional liquidity levels; we only seek longs near HTF demand/breakers and shorts near supply.
• Recursive Moving Average Unlimited (entry) — The trigger mechanism. High iteration counts filter out minor price fluctuations, requiring a persistent directional move to generate a crossover.
• MultiKAMA (TyphooN) (exit) — Uses an efficiency ratio to adapt to volatility; provides a trailing exit that tightens during high-efficiency trends and widens during noise.
• Average True Range (ATR) (risk) — Standardizes risk by setting stop-loss distance based on current market volatility.
• RSI Area (Histogram) (confirmation) — Confirms that momentum is expanding in the direction of the trend without being overextended into extreme overbought/oversold territory.

Known failure conditions

• Price remains in a range-bound state between SNAP DRT levels for >3 days.
• Indicator lag from Recursive MA (20 iterations) results in entry signals occurring after >70% of the ATR-measured move has completed.
• Failure of weekly liquidity levels to act as magnets, suggesting a regime shift to low-volatility drift.

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