Dynamic McGinley-AD Momentum Hybrid

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: Equities, Forex, Crypto · Timeframes: H1, H4, D1

Thesis

Market trends are most sustainable when price speed (McGinley) is consistent with volume flow (A/D) and low prediction error (MdAE). By entering when +DI and -DI cross in an 'inverted' fashion, the strategy bets that these temporary momentum 'glitches' are pullbacks or consolidations within a stronger, volume-backed trend, rather than true reversals.

Components

• McGinley Dynamic (regime) — Acts as the primary trend filter. Its ability to adjust for market speed reduces 'whipsaws' common in standard EMAs during volatility spikes.
• Accumulation/Distribution (A/D) Index (direction) — Ensures that price movement is supported by volume. We only trade in the direction of institutional accumulation or distribution.
• ADX Crossing INGM (entry) — Used for entry timing. Utilizing the provided logic where +DI < -DI triggers a Buy, this strategy interprets this 'inversion' as a mean-reversion entry within a primary trend.
• Stochastic Oscillator (exit) — Identifies momentum exhaustion for exits. Entering on trend-reversion but exiting on standard overbought/oversold levels.
• FractalScanner (risk) — Provides objective market structure points (swing highs/lows) for hard stop-loss placement.
• Median Absolute Error (volatility_filter) — Filters out high-noise environments. If the error between Open and Close is too high, the market is too erratic for the McGinley Dynamic to track accurately.

Known failure conditions

• Price consistently trends without volume confirmation (A/D divergence).
• Extreme 'V-bottom' reversals that the McGinley Dynamic lags significantly behind.
• High-frequency noise leading to MdAE values staying above the threshold for extended periods, preventing any entries.

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).