Zen-HP Structural Momentum Hybrid

Family: hybrid · Regime: trending · Complexity: high · Asset classes: FX, Equities, Crypto · Timeframes: H1, H4

Thesis

Market structure (Zen Theory) identifies institutional 'hubs' where price consolidates. When price breaks a hub and pulls back (Type 3 signal), it offers a low-risk entry if momentum (RSIOMA) and volume (OBV) confirm the trend's health. By using an HP Filter to isolate the cycle, we avoid entering when the immediate swing is exhausted, and use engulfing-based pivots for structurally sound risk management.

Components

Chan Lun Engine (MT4 DLL version) (regime) — Establishes the structural regime by identifying '3rd Type' entries, which represent pullbacks to broken hubs (Zhongshu), providing a high-probability context for trend continuation.
RSIOMA (RSI of Moving Average) (direction) — Filters structural signals by ensuring smoothed RSI momentum is aligned with the directional bias, reducing false breakouts common in Chan Lun.
OTLIB Stochastic Oscillator (entry) — Provides the tactical entry trigger by identifying cyclical exhaustion within the structural pullback.
Bears Power (exit) — Determines the exit by measuring the exhaustion of selling pressure (for longs) or buying pressure (for shorts) relative to the EMA trend.
Roshaneforde Pivot Levels (risk) — Uses horizontal reversal levels to set hard stop-losses and calculate risk-adjusted position sizing based on structural support/resistance.
On-Balance Volume (OBV) (confirmation) — Validates that structural breaks and entries are supported by cumulative volume flow, filtering out low-liquidity spikes.
Hodrick-Prescott Filter (HP) (volatility_filter) — Filters out 'noise' or low-volatility regimes by ensuring the cyclical component of the price is expanding in the direction of the trade.

Known failure conditions

Price penetrates the central Hub (Zhongshu) in the opposite direction of the signal.
HP Cycle component remains flat (near zero) for more than 10 bars during an active trade.
Roshaneforde Pivot levels are breached and immediately re-tested without rejection.

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