Adaptive Linear Momentum Pullback Strategy

Family: trend_following · Regime: trending · Complexity: high · Asset classes: FX, Equities, Crypto · Timeframes: H1, H4, D1

Thesis

Linear trends (low STDERR) that exhibit strong momentum (TDI) and adaptive price support (Jurik) represent high-probability environments where local volatility mean-reversions (Bollinger) offer low-risk entry points before structural trend exhaustion (HiLo). The edge relies on the assumption that 'clean' trends have higher inertia than noisy ones.

Components

• Traders Dynamic Index (TDI) (regime) — Acts as the primary regime filter; momentum is confirmed when the RSI Price Line is on the correct side of the Market Base Line and Trade Signal Line.
• Jurik Adaptive Envelope Bands (direction) — Provides a noise-filtered directional bias that adapts to market volatility, ensuring entries are aligned with the underlying structural trend.
• Bollinger Bands (entry) — Used to trigger entries on mean-reversion pullbacks within the established trend (touching the middle or opposite band).
• HiLo Activator 02 (exit) — Provides a trailing exit mechanism that accounts for price action breaching historical high/low averages.
• Williams Fractals (risk) — Sets the hard stop-loss based on the most recent structural swing point, adjusted for the 2-bar confirmation lag.
• Standard Error of Regression (STDERR) (volatility_filter) — Filters out periods of high 'trend noise' or parabolic exhaustion by requiring price to adhere to a relatively linear path.

Known failure conditions

• Extended periods of low-volatility 'sawtooth' price action where Bollinger Bands narrow and HiLo Activator whipsaws constantly.
• Price action that is consistently parabolic, causing the STDERR filter to block all entries despite a clear move.

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