Linear Correlation Trend Scalpel
Family: trend_following · Regime: trending · Complexity: medium · Asset classes: Equities, Forex, Crypto · Timeframes: H1, H4, D1
Thesis
Market trends are most sustainable when they exhibit linear consistency and are confirmed by broader market participation (Correlation). By entering only when an asset exhibits linear growth, is supported by a 'cloud' of moving averages, and is moving in sync with its sector benchmark, we isolate high-conviction moves. The Williams %R provides an entry on 'healthy' pullbacks within this confirmed structure, while the QQE's volatility bands protect against the lag inherent in standard RSI or MA exits.
Components
- Linear Regression (LINREG) (regime) — Determines the primary trend regime; a positive slope indicates a linear appreciation of price, filtering for 'smooth' trends rather than erratic spikes.
- Moving Average Ribbon (chingc) (direction) — Confirms trend direction via MA stacking (Short-term > Long-term) and ensures price has sufficient momentum to stay above the 100/200 EMA 'floor'.
- Williams %R (entry) — Identifies short-term oversold/overbought pullbacks within the established trend for precise entry timing.
- Qualitative Quantitative Estimation (QQE) (exit) — Acts as a trailing volatility-adjusted exit; the crossover of the smoothed RSI and its Fast Trailing Level signals trend exhaustion.
- ATR Projection (risk) — Sets dynamic, volatility-based stop losses and position sizes to prevent premature exit during normal noise.
- Correlation (confirmation) — Confirms the move is part of a broader market shift rather than an idiosyncratic anomaly by checking correlation with a major benchmark.
Known failure conditions
- Correlation drops below zero during an active trade, suggesting the asset has decoupled from the market logic.
- LINREG slope remains flat (near zero) for more than 5 periods, indicating a transition to a ranging regime.
- Price consistently closes inside the 20-50 MA Ribbon, suggesting a loss of 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).