WatchTower RSX Block Breakout
Family: breakout · Regime: trending · Complexity: high · Asset classes: FX, EQUITIES, CRYPTO · Timeframes: H1, M15
Thesis
Breakouts occurring near VWAP are more likely to be legitimate trends if they are accompanied by a surge in synthetic volume delta and occur within the directional bias of a noise-filtered momentum oscillator. The time-block range provides a structural anchor for risk that reflects the current session's volatility.
Components
- EMA with Switch-Based Length Reassignment (regime) — Serves as the primary trend filter, ensuring entries only occur in the direction of the ultra-short-term momentum.
- Corrected RSX (direction) — Provides a noise-filtered directional bias to ensure the trend has enough strength to overcome minor retracements.
- KandleKings™ WatchTower v1.0 (entry) — Identifies high-volume price breakouts relative to VWAP with a specific proximity constraint (1%).
- Relative Strength Index (Standard) (exit) — Used as a momentum exhaustion signal for taking profits at traditional overbought/oversold levels.
- TimeBlocks (Multifunctional Period Separator) (risk) — Sets dynamic risk boundaries (High/Low of the current time block) and monitors VWAP balance.
- Footmap – Heat & Volume [v1] (confirmation) — Uses synthetic Buy/Sell delta to confirm that volume distribution supports the direction of the breakout.
- Spread Display and Alert (volatility_filter) — Prevents execution during periods of low liquidity or high volatility spikes where slippage would invalidate the edge.
Known failure conditions
- EMA length reassignment remains dormant, leading to excessive whipsaws in low-volatility regimes.
- Synthetic volume delta consistently contradicts price action due to its linear approximation of tick data.
- Spread levels stay perpetually above the threshold, preventing any trade execution.
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