Darvas-Ehlers Expansion Hybrid

Family: breakout · Regime: trending · Complexity: medium · Asset classes: FX, Equities, Crypto (Top 20) · Timeframes: H1, H4, D1

Thesis

Market trends are preceded by 'box' consolidations where supply and demand reach temporary equilibrium. A breakout confirmed by smoothed price action (MA-Candlesticks) and medium-term directional bias (SuperTrend) identifies high-probability continuations. By exiting when price 'gravity' shifts (CG) rather than waiting for a hard stop, the strategy captures the meat of the move while exiting before volatility-induced reversals.

Components

• MA-Candlesticks (regime) — Identifies the prevailing trend regime by smoothed price action; filtered by whether current MA-Close is above MA-Open.
• SuperTrend (direction) — Acts as a primary directional filter to ensure entries align with medium-term trend momentum.
• Darvas Boxes MetaTrader 5 (entry) — Captures the breakout from local consolidation cycles, which typically marks the resumption of a trend.
• Ehlers Center of Gravity (CG) (exit) — Detects exhaustion in price momentum through balance-point shifts, allowing for an exit before a full reversal.
• ATR Heiken Ashi (risk) — Provides a smoothed volatility metric to determine stop-loss distance, reducing noise-induced exits.
• Average True Range (ATR) (volatility_filter) — Acts as a gatekeeper to ensure the market has sufficient (but not excessive) volatility to sustain a breakout.

Known failure conditions

• Price enters a protracted low-volatility 'sludge' where Darvas boxes frequently overlap without expansion.
• The asset exhibits high overnight gap risk that bypasses the CG exit logic.
• SuperTrend and MA-Candlesticks provide conflicting signals for >20% of the lookback period.

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