Weekly Bulge Reversal Strategy

Family: mean_reversion · Regime: ranging · Complexity: medium · Asset classes: FX, Equities, Crypto · Timeframes: H1, H4

Thesis

Markets are most likely to respect psychological and structural boundaries (Supply/Demand/Grid) during mid-week liquidity peaks (Tue-Thu) after a volatility expansion (Mass Index) has exhausted the current directional move. The edge exists because price often overshoots fair value before institutional players defend structural zones, creating a momentum hook (Williams %R) that can be captured.

Components

• Daily Seasonality (regime) — Filters for mid-week liquidity peaks (Tue-Thu) where supply/demand zones are most likely to hold vs. Monday range-setting or Friday profit-taking.
• Supply & Demand Zones (NNFX) (direction) — Provides the directional bias; we only look for longs at Demand and shorts at Supply.
• Williams %R (entry) — Identifies momentum recovery from oversold/overbought levels within the identified S/D zones.
• OTLIB Stochastic Oscillator (exit) — Uses smoothed momentum to signal exit when the counter-trend move has exhausted its strength.
• Grid Points Utility (risk) — Determines stop-loss placement at the nearest psychological round number (300 point intervals) outside the S/D zone.
• Mass Index (MI) (volatility_filter) — Acts as a volatility 'bulge' filter; signals that a trend is overextended and likely to reverse back from the S/D zone.

Known failure conditions

• Mass Index fails to 'bulge' during high-impact news, leading to zone breakouts rather than reversals.
• Price ignores psychological grid levels during high-volatility 'flash' moves.
• The specific asset lacks day-of-week seasonality (e.g., 24/7 Crypto markets with no weekend gap).

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