Gaussian Volume-Bias Momentum Stack

Family: trend_following · Regime: trending · Complexity: high · Asset classes: FX, Equities, Commodities · Timeframes: H1, H4

Thesis

This strategy hypothesizes that significant trend moves are preceded by positive volume momentum (VO) and a lack of negative price-prediction bias (ME), which can be captured by an ALMA Gaussian trend line if the entry occurs within a standard volatility channel (TMA). The edge relies on the behavioral tendency of volume to confirm the conviction of a price move before trend exhaustion (detected by ADX) occurs.

Components

• Volume Oscillator (VO) (regime) — Acts as a liquidity gatekeeper; ensures entries only occur during periods of expanding volume momentum.
• ALMA with Floating Levels (direction) — Provides a low-lag, Gaussian-smoothed trend direction and uses floating levels to identify if price is in a sustainable trend zone.
• OTLIB Stochastic Oscillator (entry) — Identifies cyclical turning points using LWMA smoothing to reduce noise in the overbought/oversold signals.
• ADX / Connectable [Azullian] (exit) — Uses the Directional Index and ADX threshold to detect trend exhaustion and trigger exits before reversals.
• ATR Stop Loss Finder (risk) — Sets dynamic, volatility-adjusted stop-loss levels based on recent price range.
• Mean Error (ME) (confirmation) — Filters for directional bias; ensures that the average prediction error is positive for longs and negative for shorts.
• TMA CG 2024 (Centered Moving Average) (volatility_filter) — Provides a volatility envelope; entries are only permitted if price is not at an extreme band (avoiding mean reversion exhaustion).

Known failure conditions

• The Volume Oscillator stays flat near zero during high-volatility price moves, indicating a disconnect between price and volume.
• Price consistently hits ATR stops during low-ADX regimes, indicating a failed trend-following premise.
• The Mean Error (ME) flips signs frequently without price movement, indicating a lack of directional bias.

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).