SAK Cyclical Power Trend-Following Strategy

Family: hybrid · Regime: mixed · Complexity: medium · Asset classes: Equities, Forex, Crypto · Timeframes: 1H, 4H, D1

Thesis

The 'MACD Whipsaw' is primarily a result of trading momentum in non-cyclical or directionally ambiguous regimes. By applying a Swiss Army Knife BandPass filter to ensure a cyclical impulse exists, and confirming structural bull/bear dominance via Total Power counts, we can enter MACD crossovers only when the underlying 'physics' of the market (cycles + dominance) supports a sustained move. We exit early using signal-line crosses to avoid the lag of the entry EMA crossover.

Components

• Swiss Army Knife Indicator (SAK) (regime) — Uses the BandPass (BP) setting to identify periods of cyclical energy; trades are only initiated when the filter output indicates sufficient cyclical momentum (non-zero oscillation).
• Total Power Indicator (direction) — Determines which side of the market (Bulls vs Bears) has had higher dominance over a significant lookback, ensuring we only trade in the direction of structural strength.
• MACD EMA Crossover Visualizer (entry) — Provides the immediate execution trigger when short-term momentum aligns with the structural direction.
• Connect MACD (Azullian) (exit) — Provides a more refined exit signal than a simple crossover, utilizing the histogram or signal line cross to capture exhaustion before the trailing stop is hit.
• Chandelier Exit (risk) — Dynamic volatility-based stop-loss and trailing mechanism to protect capital and lock in gains.

Known failure conditions

• SAK BandPass output remains near zero for extended periods, indicating a 'dead' or flat market regime.
• Total Power Bull and Bear lines converge and oscillate frequently, suggesting a lack of clear dominance.
• Consecutive MACD EMA crossovers occur within the ATR range of the Chandelier Exit (low signal-to-noise ratio).

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