Swiss Volatility Cycle Breakout
Family: volatility · Regime: trending · Complexity: medium · Asset classes: FX Majors, Indices, Gold · Timeframes: H1, H4
Thesis
The strategy operates on the hypothesis that directional momentum is most reliable when it emerges from a volatility expansion phase (VR) that aligns with a cyclical price thrust (SAK BandPass). By using a price-memory map to confirm the breakout and double-smoothed EMAs (TSI) to exit, the strategy aims to capture the 'meat' of a volatility-driven move while filtering out low-conviction noise and high-cost environments (Spread filter).
Components
- Swiss Army Knife Indicator (SAK) (regime) — Set to BandPass (BP) mode to identify cyclical energy. Longs are only permitted when the filter output is positive and increasing, indicating a bullish cycle phase.
- Supported map history demonstration (direction) — Provides a synthetic trend pivot. Price must be above this value (Close[1] + MapSize) for longs to ensure the current bar is overcoming the previous bar's structural memory.
- Volatility Ratio (VR) (entry) — Acts as the trigger. A value above 1.5 indicates a volatility breakout relative to the 14-period ATR, suggesting the start of a directional impulse.
- TSI Convergence Divergence (TSI_CD) (exit) — The double-smoothing of TSI provides a stable exit signal. We exit when the histogram (CD) crosses zero against the trade direction.
- Spread Display and Alert (risk) — Used as an execution filter. Trades are blocked if the current spread exceeds the historical average or a user-defined threshold to prevent slippage erosion.
- Stochastic Oscillator (confirmation) — Ensures we are not buying into an overextended move. Entry requires %K > %D but %K < 80 for longs.
Known failure conditions
- Prolonged low-volatility environments where VR never exceeds 1.5.
- Whipsaw markets where the SAK BandPass oscillates rapidly around zero.
- Missing external TSIs.mq5 file preventing the exit logic from initializing.
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