Ichimoku-VWAP Convergence System

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: Currencies (Majors), Liquid Equities, Indices · Timeframes: H1, M15

Thesis

Market trends are most tradeable when intraday volume-weighted value (VWAP) converges with long-term equilibrium (Ichimoku) and local trend momentum (Gann HiLo). The edge lies in entering established trends only during intra-day 'fair-price' pullbacks confirmed by bull/bear dominance.

Components

• Ichimoku Kinko Hyo (regime) — Serves as the primary trend filter; price must be above/below the Kumo (Cloud) to ensure the trade aligns with the established multi-timeframe equilibrium.
• HiLo_04 (Gann HiLo Activator) (direction) — Provides the directional bias; ensures the current price momentum is aligned with the short-term trend direction.
• Daily Volume-Weighted Average Price (VWAP) (entry) — Acts as the intra-day value benchmark. Entry occurs when price pulls back to or crosses the intraday average volume-weighted price.
• Donchian Channels (exit) — Used for the final exit logic when price breaks the opposite extreme of the recent price action range.
• Parabolic SAR (risk) — Dictates the initial stop loss level and the dynamic trailing stop logic based on accelerating price movement.
• Total Power Indicator (confirmation) — Confirms the trend strength by ensuring dominance of bulls/bears (momentum) is sufficiently high to prevent entering on weak corrections.

Known failure conditions

• Price enters a prolonged sideways 'squeeze' where Ichimoku cloud narrows and Gann HiLo flips frequently.
• Volume-weighted activity becomes erratic at session resets, causing VWAP entries that lack order flow follow-through.
• SAR dots are hit repeatedly in a non-trending 'sawtooth' pattern.

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