Ichimoku-Darvas Divergence Fusion

Family: trend_following · Regime: trending · Complexity: high · Asset classes: Equities, Forex, Crypto · Timeframes: 5M, 15M, 30M

Thesis

Market trends possess inertia but do not move linearly. By using Ichimoku to confirm trend structure and ADX-based Hidden Divergence to identify 'cooldown' periods in momentum, we enter as the trend resumes (Darvas breakout). The use of V3-CORPUS ensures we only participate when market activity is continuous, avoiding the noise of illiquid periods.

Components

• Ichimoku Kinko Hyo (regime) — Establishes the macro trend regime; ensures trades are only taken in the direction of the Kumo cloud and Senkou Span relationship.
• Divergence Base Template (direction) — Identifies hidden divergences between price and the ADX +DI/-DI lines, acting as a momentum-based trend continuation signal.
• DEMA 200 & ADX Combined HUD (entry) — Acts as the final execution trigger by confirming that price is above the long-term DEMA and ADX trend strength is sufficient.
• ATR Heiken Ashi (exit) — Provides a smoothed volatility-based trailing stop to allow trends to breathe while exiting on structural momentum loss.
• Darvas Boxes Modern/Classic (risk) — Defines the risk floor (stop loss) based on local consolidation levels and determines position size based on box height.
• V3-CORPUS-FRACTIONAL-SERIES-DIVISION-INT (volatility_filter) — Filters out low-activity periods or data gaps by ensuring the bar interval matches the expected timeframe duration.

Known failure conditions

• Price enters a prolonged 'squeeze' within the Kumo cloud, leading to rapid Darvas box flips.
• Significant discrepancy between ADX timeframes (30m) and execution timeframe (5m) leading to fragmented signals.
• ADX remains below 20 for >50 bars, indicating a total loss of trend momentum.

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).