Linear Extrapolation & Cascaded EMA Momentum
Family: trend_following · Regime: trending · Complexity: medium · Asset classes: FX, Indices, Crypto · Timeframes: M15, H1, H4
Thesis
The strategy hypothesizes that trends persist when the current rate of volatility expansion (extrapolated linearly via GOM BB) aligns with internal bar strength (ADR) and ultra-low-lag momentum (HMA/MCNMA). It assumes that the median candle body size (MdAE) represents the 'noise floor' of the market, allowing for a risk-adjusted stop that is robust to tail-risk outliers.
Components
- GOM BB Prediction (300 bars) (regime) — Acts as a regime filter; only enters when the projected 300-bar trajectory of the outer Bollinger Bands suggests volatility expansion or trend persistence in the desired direction.
- Hull Moving Average (HMA) (direction) — Provides the primary trend bias. The lag-reduction of HMA ensures the strategy stays on the right side of fast-moving price action.
- McNicholl EMA (MCNMA) (entry) — The cascaded EMA structure provides a highly sensitive trigger point for entry, minimizing 'dead time' during trend ignition.
- Bollinger Bands (Standard) (exit) — Used for mean-reversion exits once price reaches the statistical extremes of current (not predicted) volatility.
- Median Absolute Error (risk) — Determines the 'noise floor' of the recent price action to set a robust, outlier-resistant stop loss.
- Advance/Decline Ratio (Bars) (confirmation) — Confirms internal bar strength; ensures that the majority of recent bars are closing in the direction of the trade, preventing entry on 'hollow' momentum.
Known failure conditions
- GOM BB Prediction slope turns flat or negative during the trade, indicating a loss of linear momentum.
- ADR_B falls below 1.0 during a long trade, suggesting the internal market structure is shifting to bearish dominance.
- Price enters a high-frequency 'whipsaw' regime where HMA and MCNMA cross repeatedly within the MdAE range.
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).