Bandpass-Darvas Cyclical Breakout

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

Thesis

The strategy hypothesizes that sustainable trends are preceded by specific cyclical frequencies and structural consolidations. By isolating the 'market heartbeat' via a Bandpass Filter and waiting for a Darvas Box breakout that aligns with Fisher-transformed momentum and adaptive volatility (VIDYA), we capture the highest-velocity phase of a trend while using Smart Money zones (GOM KOLA) for risk mitigation. The edge lies in filtering out non-cyclical noise that often causes false breakouts in traditional Darvas systems.

Components

• Bandpass Filter (BPF) (regime) — Acts as the primary regime filter, ensuring the strategy only enters trades when price is within a specific frequency band, filtering out both high-frequency noise and long-term secular trends.
• Solar Wind NRP (MQL5) (direction) — Provides the directional bias using a Fisher-transformed oscillator; the NRP (Non-Repainting) setting is critical to ensure signal stability.
• Darvas Boxes Modern/Classic (entry) — Detects breakouts from established consolidation ranges. The PivotStrength provides the necessary lag to confirm that a structure has indeed been broken.
• Donchian Channels (exit) — The classic Turtle exit; provides a trailing exit mechanism that allows the trade to breathe during trends while cutting it when the trend-structure fails.
• GOM KOLA SIDO — Full Integration (risk) — Determines the dynamic stop-loss using KOLA Zones and Supertrend levels, providing a structural risk buffer.
• Momentum Oscillator (confirmation) — Confirms the velocity of the breakout; ensures that price is actually accelerating in the direction of the trade rather than just drifting out of the box.
• Variable Index Dynamic Average (VIDYA) (volatility_filter) — Serves as an adaptive volatility filter; price must be on the 'correct' side of the VIDYA to ensure volatility is expanding in our favor.

Known failure conditions

• Prolonged period of 'Brownian Motion' where BPF produces flat/neutral signals across all timeframes.
• Consecutive Darvas Box breakouts that immediately reverse (false breakouts) indicating a 'Ranging' regime that the BPF failed to filter.
• Solar Wind NRP oscillations that occur faster than the Darvas PivotStrength can react.

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