Weekly Gap Momentum Pin-Darvas Hybrid

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

Thesis

The weekly opening gap reflects institutional sentiment shifts over the weekend. By trading in the direction of this gap when price action (Pinbars) confirms a continuation, we align with the week's probable expansion direction. The ZLSMA and TDI serve as filters to ensure we are not entering a 'gap-fill' trap, while Darvas Boxes provide structural protection against volatility spikes.

Components

• Sunday Opening Gap (regime) — Acts as the weekly regime filter; we only look for trades in the direction of the weekend sentiment gap, assuming it represents an institutional positioning shift.
• Traders Dynamic Index (TDI) (direction) — Provides momentum and volatility confirmation; ensures the RSI price line has broken its signal and is within/outside volatility bands to confirm strength.
• Pinbar Detector (entry) — Identifies high-probability price action reversal/continuation points at the tip of the momentum wave.
• Restu Kaioh Scalping Indicator (exit) — Uses localized stochastic overextension to exit trades before the momentum fully mean-reverts.
• Darvas Boxes (Multi-Mode) (risk) — Identifies the structural floor/ceiling of the current consolidation; used to set hard stop-losses and determine risk-adjusted position sizing.
• Zero Lag Least Squares Moving Average (ZLSMA) (confirmation) — Provides a highly responsive trend filter to ensure entries are aligned with the immediate short-term trend without the lag of a standard SMA.

Known failure conditions

• Sunday Gap is filled within the first 4 hours of Monday trading (indicates a lack of weekly conviction).
• Price remains inside the previous week's Darvas Box for more than 48 hours (indicates low-volatility ranging).
• ZLSMA turns flat (slope < 0.0001) for extended periods.

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