Chan-VARR Efficient Breakout

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

Thesis

Market trends move most efficiently when price breaks structural consolidation (Chan Lun Hubs) with low 'effort' relative to 'result'. High Volume-to-Absolute-Return Ratio (VARR) suggests absorption and exhaustion, while low VARR suggests price discovery in a vacuum. By entering on 3rd Type Chan signals only when momentum (ROC) is positive and VARR is low, we capture high-velocity expansion phases.

Components

• ProfitRobots Dashboard Text Template (regime) — Provides a multi-timeframe regime filter to ensure the symbol is being tracked across the portfolio before executing structural signals.
• Rate of Change (ROC) (direction) — Acts as a time-series momentum filter to ensure that structural entries are aligned with recent price velocity.
• Chan Lun Engine (MT4 DLL version) (entry) — Identifies the 3rd Type Buy/Sell signals, which represent a breakout and successful retest of a central hub (Zhongshu), indicating trend continuation.
• Momentum Oscillator (exit) — Identifies exhaustion; an exit is triggered when momentum begins to decelerate after a structural expansion.
• FakeCandle (risk) — Defines the risk parameters (Stop Loss) based on the visual price bounds calculated by the NNFX-compliant candle overlay.
• Volume to Absolute Return Ratio (volatility_filter) — Serves as an 'Efficiency Filter'; trades are only taken when the ratio is low, signifying that price is moving with low resistance (high result for low volume effort).

Known failure conditions

• VARR remains high (near infinity) due to low volatility, preventing all entries.
• Chan Lun DLL fails to synchronize strokes during fast market moves (news events).
• Momentum Oscillator stays above 100 for extended periods in 'melt-up' scenarios, causing 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).