TLB-Darvas Volatility Breakout System

Family: breakout · Regime: trending · Complexity: high · Asset classes: Equities, Forex Major Pairs, Large Cap Crypto · Timeframes: H1, H4, D1

Thesis

Market trends are preceded by structural breakouts from consolidation ranges (Darvas), which represent a shift in the supply/demand equilibrium. By filtering these breakouts through Three-Line Break charts (structural trend) and Gator (volatility expansion), we isolate high-conviction moves and avoid noise-induced false signals. Candlestick patterns provide the final confirmation that institutional/retail participants are committing to the new direction.

Components

• MQL5 Calculation Sample (regime) — Used to validate data integrity (rates_total > 0) and ensure the calculation environment is stable before executing logic.
• Three-Line Break (TLB) with MA (direction) — Filters out minor price noise to establish the primary trend direction through structural price reversals.
• Darvas Boxes Modern/Classic (entry) — Identifies consolidation ranges; the breakout of the box serves as the specific momentum entry trigger.
• Relative Vigor Index (RVI) (exit) — Identifies momentum exhaustion through signal line crossovers to capture the meat of the move before a reversal.
• Auto Fibonacci (risk) — Provides dynamic price-structure levels for stop-loss placement based on the most recent swing range.
• Pattern Recognition Master (confirmation) — Provides a secondary layer of confirmation by identifying bullish/bearish sentiment via candlestick geometry at the breakout point.
• Gator Oscillator (volatility_filter) — Acts as a volatility gate to ensure entries only occur during 'eating' (trending) phases, avoiding 'sleeping' (flat) markets.

Known failure conditions

• Frequent TLB 'whipsaws' where price breaks 3 lines then immediately reverses, indicating lack of trend depth.
• Gator Oscillator remains in 'sleeping' phase (red histograms) for extended periods while Darvas signals trigger.
• The MQL5 Calculation Sample logs significant gaps in Time_start and Time_end, suggesting data feed instability.

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