Wavelet-Adaptive OI Trend System

Family: hybrid · Regime: trending · Complexity: high · Asset classes: Crypto Futures, Indices (with OI data) · Timeframes: 1H (Execution), 30m (Regime)

Thesis

The system hypothesizes that sustainable market trends are identifiable by the synchronization of filtered price cycles (DWT) and aggressive positioning (Open Interest). By entering only when adaptive momentum aligns with these higher-order signals, we filter out speculative noise and participate only in institutional-driven expansions.

Components

• DEMA 200 & ADX Combined HUD (regime) — Establishes the macro trend bias and ensures momentum is sufficient (ADX > 20) to avoid ranging traps.
• Discrete Wavelet Transform (DWT) (direction) — De-noises the price series to identify the 'true' underlying directional cycle without the jitter of standard oscillators.
• Smoothed Adaptive Momentum (entry) — Uses Ehlers Homodyne Discriminator to adapt to current cycle lengths, providing a precisely timed momentum entry trigger.
• MA Channel (Framework Version) (exit) — Detects structural exhaustion by tracking bars since the last breakout/re-entry into the mean-reversion channel.
• Extrem SuperTrend (risk) — Provides the hard trailing stop and the basis for volatility-adjusted position sizing.
• Open Interest Suite [Aggregated] - By Leviathan (volatility_filter) — Confirms that price movement is backed by new aggressive participants rather than just short-term speculation or low-liquidity spikes.

Known failure conditions

• Dominant cycle length becomes shorter than the DWT decomposition lag, leading to constant late entries.
• Open Interest stays flat or declining during price trending (suggesting trend exhaustion or short covering).
• ADX stays below 20 for extended periods, causing the strategy to never trigger.

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