Elliott-Standard Error Impulsive Trend Follower

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

Thesis

Market 'Motive Waves' (Waves 3 and 5) represent periods of maximum participation and psychological consensus. By filtering these phases for volatility expansion (Gator) and confirming bar-by-bar strength (ADR), we can enter trends with high momentum. Using Standard Error of Regression for risk allows us to decrease exposure when price action becomes erratic or deviates from a clean linear trend, while Parabolic SAR provides an objective exit for exhausting momentum.

Components

• Elliott Wave [LuxAlgo] (regime) — Provides the structural regime; entries are only sought during active Wave 3 or Wave 5 motive sequences to capture impulsive phases.
• Chandelier Exit (direction) — Acts as a volatility-adjusted directional filter to ensure price momentum aligns with the identified Elliott Wave structure.
• Qualitative Quantitative Estimation (QQE) (entry) — Used for the final entry trigger; the RSI_MA crossing the Trailing Level signals a momentum shift within the broader trend.
• Parabolic SAR (Standard) (exit) — Provides a systematic trailing exit that tightens as the trend accelerates, protecting gains during wave exhaustion.
• Standard Error of Regression (STDERR) (risk) — Quantifies trend 'cleanliness'; used to set stop loss distance and scale position size based on how well price adheres to a linear path.
• Advance/Decline Ratio (Bars) (confirmation) — Confirms internal bar strength; ensures that the move is supported by a majority of candles closing in the trade direction.
• Gator Oscillator (Standard) (volatility_filter) — Filters out low-volatility/corrective periods; trade only when the 'Gator' is eating (expanding histograms).

Known failure conditions

• Elliott Wave sequences repeatedly failing to complete (e.g., Wave 4 retracing into Wave 1 territory consistently).
• High frequency of SAR exits immediately followed by trend resumption, indicating excessive noise.
• STDERR remains consistently high during trending moves, suggesting non-linear/parabolic price action that the linear model cannot track.

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