Basket-Filtered Fractal Momentum

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: FX Majors, FX Minors · Timeframes: H1, H4

Thesis

Trending moves in FX are most sustainable when driven by broad-based currency flows (Regime) rather than idiosyncratic pair noise. By waiting for local market structure to break (Fractals) in alignment with smoothed momentum (Heikin Ashi), we can isolate the 'meat' of a trend. Laguerre RSI provides a superior exit by identifying when momentum is overextended relative to its own recent volatility.

Components

• Currency Strength Template (regime) — Filters for trades where the base currency is structurally stronger than the quote currency across the entire market basket.
• Heikin Ashi (direction) — Provides the directional bias by smoothing noise; requires consecutive bars to confirm momentum.
• Williams Fractals (entry) — Identifies local liquidity pools; breaking a fractal confirms a shift in market structure in the direction of the trend.
• Laguerre RSI (exit) — Identifies momentum exhaustion through gamma-smoothed price action to capture mean-reversion exits before full trend reversal.
• Chandelier Exit (risk) — Provides a dynamic, volatility-adjusted stop loss that scales with current market range (ATR).

Known failure conditions

• Consecutive stop-outs during low-volatility 'zig-zag' strength readings where no clear currency leader emerges.
• Price action stays within a narrow range while Laguerre RSI stays pinned at extremes, triggering premature exits.

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).