Institutional Exhaustion & Liquidity Filter

Family: hybrid · Regime: trending · Complexity: high · Asset classes: Equities, Crypto, Forex · Timeframes: 30m, 1H, 4H

Thesis

Institutional distribution precedes price reversals. By combining classical momentum (ADX/SuperTrend) with a Distribution Day (D-Day) counter and Volume Profile 'Key Zones', we can enter trends only when institutional participation is supportive and price is not yet at an exhaustion point (Climax). The edge lies in avoiding the 'late-stage' trend entries where retail FOMO peaks and institutions are already offloading.

Components

• Combined Candle Counter (CCC) Dev (regime) — Acts as the primary environment filter; prevents entries during institutional distribution (D-Days) or retail exhaustion (Climax signals).
• SuperTrend (direction) — Provides a binary trend filter to ensure the trade is aligned with the intermediate-term volatility-adjusted path.
• DEMA 200 & ADX Combined HUD (entry) — The trigger mechanism. DEMA 200 ensures long-term bias, while ADX > 25 confirms the presence of sufficient momentum to initiate a move.
• ATR SL Finder (exit) — Calculates the technical invalidation point based on current volatility, providing the 'denominator' for the risk-based position sizing.
• Dynamic Supply and Demand Zones [AlgoAlpha] (risk) — Used to validate the risk/reward profile. Entries are discarded if a high-volume supply/demand zone is too close to the entry, and used to define the 'safe' area for position sizing.

Known failure conditions

• The ADX stays above 25 but price oscillates in a tight range, indicating a 'churning' market where volume doesn't lead to price expansion.
• High-frequency D-Days appear on the CCC without corresponding price drops, suggesting the distribution logic is capturing noise rather than institutional selling.

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