TLB-Fractal Momentum Congruence Strategy

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: Equities, Forex, Major Indices · Timeframes: H1, H4, D1

Thesis

Market trends exhibit 'persistent inertia' when noise-filtered. By combining Three-Line Break (noise reduction) with MACD (momentum) and Fractal Trendbreaks (structural confirmation), we can capture the core of a move while ignoring the volatility 'fuzz' that typically triggers stops. Logic suggests that if price breaks a fractal while TLB expresses a new trend, a significant momentum shift is occurring.

Components

• Three-Line Break (TLB) with MA (regime) — Acts as the primary regime filter to ensure trades are only taken in established, noise-filtered trends.
• MACD Demo Implementation (direction) — Provides momentum confirmation; trades are only taken when momentum aligns with the TLB trend.
• Trend Break Fractal (entry) — Used as the specific entry trigger point when price breaks a local structural level (fractal) in the direction of the trend.
• ATR Stop Loss Finder (exit) — Used as a trailing exit mechanism to capture trend extensions while protecting against volatility spikes.
• Constant Range Channel (risk) — Determines position sizing and initial stop-loss placement based on a fixed-tick structural volatility.
• t_ma (Smoothed LWMA) (confirmation) — Used as a secondary trend confirmation to ensure the price action is not overextended and has structural support.

Known failure conditions

• The strategy fails if the market enters a long-term narrow bracket where fractal breaks occur at the same time MACD crosses the zero line, leading to rapid whipsaws.
• Fails if 't_ma' lag prevents exits before a 100% retracement of the move.

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