Squeeze-Wave Order Block Hybrid

Family: hybrid · Regime: trending · Complexity: high · Asset classes: FX, CRYPTO, EQUITIES · Timeframes: H1, H4

Thesis

Market trends occur in fractal cycles (Elliott Waves) that are preceded by periods of volatility compression (TTM Squeeze). By identifying the start of a Wave 3 (the strongest impulse) within a macro ZigZag structure and filtering for volatility expansion, we enter high-probability momentum moves. Using Order Blocks as 'Institutional footprints' provides a structural anchor for risk that is superior to arbitrary percentage-based stops.

Components

• ZigZag (regime) — Provides the primary macro-structural framework by identifying confirmed swing highs/lows; used to define the regime before cycle analysis begins.
• Elliott Wave [LuxAlgo] (direction) — Identifies the specific impulse or corrective cycle (Wave 3 or C) within the ZigZag structure to determine direction.
• Legacy Trading Connector (OptionX) (entry) — Acts as the execution bridge, triggering the trade only when the specific Arrow IDs (representing the confluence of EW and price action) are generated.
• Donchian Channels (exit) — Provides a trailing exit mechanism that captures the meat of the Elliott Wave impulse while exiting on a structural breakout in the opposite direction.
• Sonarlab - Order Blocks (risk) — Used to define the invalidation point (Stop Loss) and calculate position size based on high-momentum supply/demand zones.
• TTM Squeeze (Carter Ratio version) (confirmation) — Filters for volatility 'coiling'; entries are only permitted when the Carter Ratio indicates a squeeze state or a fresh momentum release.

Known failure conditions

• ZigZag depth is too small, causing frequent 'fake' swing confirmations in ranging markets.
• TTM Squeeze ratio remains below 0 for extended periods, indicating a total lack of tradable volatility.
• Elliott Wave rules (Wave 4 low > Wave 1 high) are violated immediately after entry, invalidating the motive hypothesis.

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