USDX-Darvas Weekly Expansion Model

Family: hybrid · Regime: trending · Complexity: high · Asset classes: Forex (Majors) · Timeframes: H1, H4

Thesis

Weekly currency trends are established by Monday's range-setting, followed by mid-week expansions (Tue-Thu) driven by USD sentiment. By confirming USDX direction and volume-backed Darvas breakouts, we capture these expansions. Using Fractal liquidity sweeps for stop-loss anchoring ensures we are protected by structural institutional 'stop hunts' rather than arbitrary fixed pips.

Components

• Color Candles Daily (regime) — Used to isolate mid-week institutional expansion days (Tue-Thu) and filter out Monday range-setting and Friday profit-taking.
• USDX (US Dollar Index) Tracker (direction) — Provides directional bias by tracking the strength of the USD basket; for EURUSD/GBPUSD, a bearish USDX MA cross suggests bullish potential.
• Darvas Boxes MetaTrader 5 (entry) — Identifies technical breakout points from local consolidation zones.
• MACD Classic (3-Line) (exit) — Used to detect momentum exhaustion via signal line crossovers for timely exits.
• Open Source Fractal Model (risk) — Provides stop-loss placement based on high-timeframe liquidity sweeps and Change in Sub-structure (CISD) levels.
• Accumulation/Distribution (A/D) (confirmation) — Confirms that breakouts are backed by cumulative volume/money flow rather than low-liquidity spikes.
• TimeBlocks (Multifunctional Period Separator) (volatility_filter) — Filters for entries that occur when price is trading on the 'correct' side of the intraday VWAP equilibrium.

Known failure conditions

• Persistent decoupling of constituent currency pairs from the USDX basket (e.g., extreme idiosyncratic EUR strength).
• High-impact news events that invalidate HTF fractal structures instantly.
• Prolonged periods of low volume where the A/D line stays flat regardless of price breakouts.

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