Box-Force Dynamic Equilibrium Strategy

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

Thesis

Market trends move in steps; after a volatility breakout (Boxline), price often leaves behind liquidity imbalances (FVGs). A return to equilibrium (measured by the Center of Gravity) within a momentum-aligned trend (Average Force) provides a high-probability entry point before the trend resumes. This edge exploits the behavioral tendency of markets to 'fill gaps' before continuing the primary trend.

Components

• Boxline (Dynamic Range Breakout) (regime) — Defines the market regime; we only trade in the direction of the most recent breakout of the Step-Range.
• Average Force (direction) — Ensures momentum alignment with the breakout to filter out low-energy range expansions.
• Ehlers Center of Gravity (CG) (entry) — Identifies the optimal entry point by finding cycle turning points (mean reversion) within the trending regime.
• Donchian Channels (exit) — Provides a hard exit logic based on the reversal of the trend's extremum (Middle for trailing or Lower for hard exit).
• Parabolic SAR (risk) — Used for dynamic stop-loss placement and initial risk calculation.
• Fair Value Gap (FVG) Indicator (confirmation) — Confirms that the entry trigger is supported by a recent liquidity imbalance in the trade direction.

Known failure conditions

• Regime where Boxline steps occur frequently but price returns to the middle immediately (high-volatility ranging).
• The CG oscillator stays pegged at extremes during strong parabolic moves, causing missed entries.
• FVG mitigation happens so quickly that the signal disappears before the CG trigger occurs.

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