Sunday Gap Trend Expansion Stratagem

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: FX, Commodities, Indices · Timeframes: H1

Thesis

The 'Weekly Momentum Compression' hypothesis posits that when the market maintains the direction of a Sunday Opening Gap and the SuperTrend, an Inside Bar breakout identifies the specific moment when volatility expands from a consolidation phase. This edge exists because traders often hesitate during the first consolidation after a gap; the breakout confirms that the weekend sentiment was not a temporary 'noise' event but the start of a sustained weekly move.

Components

• Sunday Opening Gap (regime) — Establishes the weekly volatility regime and initial sentiment context; defines the 'anchor' price for the week.
• SuperTrend (direction) — Provides the primary trend filter and volatility-adjusted direction to ensure entries align with momentum.
• Inside Bars (MTF Framework) (entry) — Signals a period of price compression and volatility contraction, serving as the trigger for an expansion breakout.
• Average True Range (ATR) (exit) — Used to set a volatility-normalized profit target relative to the trade's entry price.
• ATR SL Finder (risk) — Calculates dynamic, volatility-anchored stop loss levels to account for current market noise.

Known failure conditions

• SuperTrend flips direction more than 3 times within a single 48-hour period (indicates high-noise chop).
• Inside Bar breakout fails to reach 0.5R before price returns to the opposite side of the IB range.
• Weekly price action remains entirely within the Sunday Gap range for more than 72 hours.

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