HP-Filtered Cyclical Volume Trend

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

Thesis

Market trends move in cyclical waves where price temporarily deviates from the trend-line due to short-term imbalance; an edge exists when a cyclical trough (DPO) aligns with institutional volume accumulation (WAD) and a confirmed structural shift (ADX) within a macro-regime. This hypothesis assumes that volume-weighted accumulation precedes price breakout from cyclical lows.

Components

• MA Channel (Framework Version) (regime) — Establishes the primary trend regime; trades are only taken in the direction of the trend counter (Long > 0, Short < 0).
• ADX Crossing INGM (direction) — Provides the directional bias; utilizes the prompt-specified 'inverted' logic where +DI < -DI represents a bullish shift.
• Detrended Price Oscillator (DPO) (entry) — Identifies cyclical turning points by finding local oversold/overbought conditions within the filtered trend.
• ZigZag Color (Classic) (exit) — Provides structural exit points based on confirmed price reversals to capture the majority of a swing leg.
• Session Range (High/Low/Mid) (risk) — Defines the risk floor/ceiling for stop-loss placement based on intraday volatility boundaries.
• Williams Accumulation/Distribution (WAD) (confirmation) — Confirms that price movement is supported by actual buying/selling pressure (volume-weighted).
• Hodrick-Prescott Filter (HP) (volatility_filter) — Acts as a volatility filter by ensuring price is on the correct side of the smoothed macroeconomic trend component.

Known failure conditions

• Protracted sideways price action where MA Channel narrows significantly and ADX whipsaws.
• Low volume environments where WAD produces stagnant, flat readings.
• Session range being excessively wide (e.g., news events), leading to poor R:R.

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