SAK-Wave Butterworth Momentum Hybrid

Family: hybrid · Regime: trending · Complexity: high · Asset classes: FX, Equities, Crypto · Timeframes: H1, H4

Thesis

The strategy posits that high-probability entries occur when a second-order trend filter (SAK) aligns with a structural POC reclaim (WaveTrend), provided that market volatility exceeds a minimum threshold (PAM) and immediate price action confirms the move via a 3-period median (Linear Percentile). The edge lies in the filtering of noise through higher-order mathematics before looking for structural volume confirmations.

Components

• Indicator Base Template (regime) — Manages memory and object prefixing for the complex multi-indicator environment.
• Swiss Army Knife Indicator (SAK) (direction) — Used in Butterworth mode to provide a smooth second-order trend bias without the extreme lag of standard moving averages.
• WaveTrend v3 [WavesUnchained] (entry) — Acts as the primary entry trigger by combining CCI-based momentum with volume profile POC reclaims and market structure pivots.
• Relative Vigor Index (RVI) (exit) — Used to exit positions when the conviction of the move (closing price relative to range) begins to decelerate.
• Average True Range (ATR) (risk) — Provides volatility-adjusted stop-loss distances and position sizing.
• Linear percentile single hole length 3 percentage 50 v1 (confirmation) — Provides ultra-short-term 'micro-confirmation' to ensure current price is on the correct side of the 3-period median at the moment of execution.
• PAM (Price Action Master) - Volatility Filter Version (volatility_filter) — Filters out 'dead' market regimes where ATR is too low to cover spread and slippage.

Known failure conditions

• Static PAM threshold renders the strategy inert on low-nominal price assets (e.g., JPY pairs) or hyper-volatile ones (e.g., BTC) without manual adjustment.
• The 'Alignment Score' in WaveTrend repaints historical values, making backtests appear significantly better than live execution.
• The 3-period linear percentile triggers too many false starts in sideways consolidation.

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