Fractal Order Block Momentum Hybrid

Family: hybrid · Regime: trending · Complexity: high · Asset classes: FX, Equities, Crypto · Timeframes: H1, H4

Thesis

Market trends are structural and fractal; an edge exists by entering where institutional momentum (Order Blocks) aligns with fractal trend direction (FRAMA). By filtering these entries with RSX (momentum quality) and MSLE (ensuring price is not too far from its log-mean), we can enter during high-probability corrective pullbacks before the next impulse phase.

Components

• RSX (Relative Strength Quality Index) (regime) — Filters out noise to define the mid-term momentum regime; values above 50 suggest a bullish bias without the lag of standard RSI.
• Ehlers Fractal Adaptive Moving Average (FRAMA) (direction) — Provides the primary trend filter by adjusting its smoothing based on fractal dimension, staying flat in ranges and steep in trends.
• Sonarlab - Order Blocks (entry) — Identifies institutional liquidity zones created by ROC-based momentum bursts to pinpoint high-probability entry areas.
• HiLo Activator 02 (exit) — Acts as a trailing stop and regime-exit trigger, capturing the 'staircase' move of a trend.
• PiPi (Price Infrastructure & Position Interface) (risk) — Calculates dynamic support levels based on Fibonacci retracements within price contexts to set precise risk levels.
• Mean Squared Logarithmic Error (MSLE) (volatility_filter) — Filters out entries during periods of extreme price-to-mean deviation (overextension) using logarithmic variance.

Known failure conditions

• Prolonged periods where price 'hugs' the FRAMA line without establishing fractal clarity.
• Order block formation in low-volume environments where ROC sensitivity is met but liquidity is absent.
• Failure of the log-error filter to expand during high-impact news events, leading to missed volatility expansions.

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