Wavelet-Recursive Momentum Synchronizer

Family: trend_following · Regime: trending · Complexity: high · Asset classes: FX, Equities, Indices · Timeframes: H1, H4

Thesis

Market trends represent institutional momentum that manifests across multiple timeframes simultaneously. By requiring synchronization of three ADX periods (Regime) and the lowest-frequency component of a Wavelet transform (Direction), we filter for 'true' trends. Recursive smoothing and candle body delta (Confirmation) ensure we enter only when the strength of the move overcomes the inherent lag of these filters, betting on trend persistence over short-term noise.

Components

• Easy Trend Visualizer (ETV) (regime) — Defines the market regime by requiring triple-period ADX alignment (all increasing) and specific threshold breaches to ensure a high-conviction momentum environment.
• Discrete Wavelet Transform (DWT) (direction) — Uses a Haar stationary wavelet to filter out market noise (low-level coefficients) and isolate the low-frequency trend approximation.
• Recursive Moving Average Unlimited (entry) — Provides the final execution trigger via a multi-iterative smoothing process that identifies the precise moment price momentum breaks from its recursive average.
• SSL Channel (exit) — Provides a trailing stop and exit mechanism based on the high/low price boundaries, typical for trend-following systems to capture the meat of the move.
• Spread Display and Alert (risk) — Filters entries during periods of low liquidity or high volatility spikes where transaction costs would invalidate the narrow edges of the strategy.
• Size Highs and Lows 2 (confirmation) — Confirms entries by ensuring that the net candle body magnitude (delta) favors the trade direction, preventing entries on low-volume 'drifts'.
• Indicator Sample Skeleton (volatility_filter) — Used as a 'data sufficiency' check; the strategy remains dormant until iBars() reaches a threshold, ensuring recursive and wavelet calculations have stable historical buffers.

Known failure conditions

• The triple ADX alignment occurs frequently in choppy markets (false momentum).
• Recursive MA overshoots significantly during 'V' reversals, leading to late exits.
• Asset-specific spread thresholds are set too low, preventing all trades on specific brokers.

Explore the full interactive blueprint, parameter ranges and evidence on WOBR StrategyVerse, or generate this strategy as an MT4/MT5 Expert Advisor with QuantMogul AI Engine.