EVZ-Gated Momentum Trend Follower

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: Forex (EURUSD) · Timeframes: H1, H4

Thesis

The hypothesis is that trend-following signals on EURUSD are most reliable when expected market volatility (EVZ) is low to moderate, allowing technical momentum (CCI/TII) to manifest without excessive noise. By using the Euro VIX as a macro filter and TopTrend for volatility-adjusted regime definition, we can isolate high-probability momentum bursts while using TSI_CD to exit before mean reversion occurs.

Components

• TopTrend (BBands Stop) (regime) — Identifies the prevailing volatility-adjusted trend regime to filter out counter-trend trades.
• Trend Intensity Index (TII) (direction) — Confirms momentum concentration by comparing price deviations, ensuring we enter when the trend's internal strength is high.
• Commodity Channel Index (CCI) (entry) — Provides a tactical entry trigger when price accelerates in the direction of the confirmed trend.
• TSI Convergence Divergence (TSI_CD) (exit) — Used for early exit by detecting when price momentum begins to decelerate relative to its signal line.
• ATR SL Finder (risk) — Provides dynamic stop-loss levels based on immediate volatility to protect capital.
• Euro FX VIX (EVZ) Data Loader (volatility_filter) — Filters out trades during periods of excessive expected volatility, where technical signals are often noise-dominated.

Known failure conditions

• A sustained increase in EVZ levels (implied volatility) leading to repeated technical failures.
• Market entering a tight trading range where BBands Stop and CCI generate frequent whipsaws.
• Structural breakdown in the correlation between EURUSD price action and Euro FX VIX expectations.

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