Linear Momentum Discount Strategy

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: FX, Equities, Crypto · Timeframes: M15

Thesis

Market trends are most tradable when high-timeframe bias (H1) aligns with local linear trends. By entering specifically when momentum 'resets' (MACD cross below 0 in an uptrend), we capture the resumption of the trend at a structural discount. This edge is further protected by a volatility filter that benchmarks current activity against global FX volatility to ensure liquidity is present.

Components

TF Bias Detector (SMC) (regime) — Filters for multi-timeframe alignment, ensuring the H1 trend and momentum are supportive before lower-timeframe execution.
Linear Regression (LINREG) (direction) — Confirms the local trend direction via the slope of the least-squares line, reducing entries against the prevailing price vector.
MACD EMA Crossover Visualizer (entry) — Provides the final execution trigger when the Fast EMA crosses the Slow EMA in the direction of the confirmed regime.
Money Flow Index (MFI) (exit) — Exits positions when volume-weighted momentum reaches exhaustion levels (overbought/oversold).
Grid Bot [Grid range plugin] Two Moving Avarages [psyll] (risk) — Provides dynamic volatility-based support and resistance levels for stop-loss placement.
MACD signal turn (confirmation) — Identifies 'discounted' entries where momentum crosses over while the oscillator is on the 'wrong' side of zero, signaling a mean-reversion setup within a trend.
Range Volatility Monitor (volatility_filter) — Filters out low-volatility 'noise' by requiring the current symbol's range to exceed a benchmark of major FX pairs.

Known failure conditions

Extended periods of low volatility where the Range Volatility Monitor never triggers.
High-correlation environments where the 4 reference FX pairs move identically to the traded asset, neutralizing the volatility filter.
Persistent 'chopping' where MACD crosses zero frequently without trend extension.

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).