HP-Ichimoku Cyclical Trend Navigator

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

Thesis

Market trends exhibit both a long-term economic growth component and a medium-term equilibrium. By isolating the 'cyclical noise' from the HP-filtered trend and waiting for Ehlers DSP momentum to realign with the Ichimoku cloud's structural bias, we catch high-probability trend continuations after pullbacks. The risk is minimized by using MTF structural lows to ensure we are not stopped out by intraday noise.

Components

• Hodrick-Prescott Filter (HP) (regime) — Identifies the macro trend regime; we only trade in the direction of the HP trend and when the HP cycle is extended.
• Ichimoku Kinko Hyo (direction) — Provides the directional filter; price must be on the correct side of the Kumo cloud to confirm trend alignment.
• Ehlers Detrended Synthetic Price (DSP) (entry) — Used as a timing trigger to enter on cyclical pullbacks within the established trend.
• Chandelier Exit (exit) — Provides a dynamic trailing stop based on volatility to capture trend extension while protecting gains.
• Daily High Low MTF (risk) — Used to define the Stop Loss level at the previous day's extreme and determine position size based on risk-to-level.
• Standard Deviation (volatility_filter) — Filters out low-volatility environments (squeeze) where the HP filter and Ichimoku are prone to whipsaws.

Known failure conditions

• Prolonged sideways markets where HP Cycle and DSP oscillate without price progression.
• Breakdown of the cyclical relationship between current timeframe and Daily extremes.
• High-frequency news events causing spikes through Chandelier trailing stops before trend resumption.

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).