Solar-Filtered Structural Breakout

Family: breakout · Regime: trending · Complexity: medium · Asset classes: Equities, Forex, Crypto · Timeframes: H1, H4, D1

Thesis

Head and Shoulders patterns represent a failure of the market to sustain a new high/low; when these occur in the direction of a larger trend (filtered by SMA) and are confirmed by a shift in cycle momentum (Solar Wind), they signal a high-probability continuation of the primary trend after a correction.

Components

• Simple Moving Average (SMA) (regime) — Filters for major trend direction to ensure we only trade patterns aligned with long-term momentum.
• Solar Wind NRP (MQL5) (direction) — Acts as a cycle-momentum filter to ensure the market structure breakout is supported by a shift in oscillator velocity.
• HS Indicator (Head & Shoulders) (entry) — Identifies specific structural exhaustion and reversal patterns (H&S/iH&S) as the primary entry catalyst.
• Relative Vigor Index (RVI) (exit) — Signals momentum exhaustion for exit purposes before a full trend reversal hits the stop loss.
• ATR SL Finder (risk) — Provides volatility-adjusted risk buffers to protect against noise while allowing the structural pattern room to breathe.

Known failure conditions

• Strategy underperforms a simple Buy-and-Hold during strong trending markets due to early RVI exits.
• Frequent stop-outs occur because the ATR multiplier is too tight for the lag in H&S detection.
• The Solar Wind NRP produces high-frequency flip-flops in low-volatility environments, eroding capital through spread costs.

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