Linear Structural Trend Expansion (LSTE) System

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: FX, Equities, Indices · Timeframes: H1, H4

Thesis

Market trends are most tradable when price moves with 'linear efficiency' (low standard error) away from structural anchors (Daily Highs/Lows). By combining a dual-MA filter (L'mas) with a regression filter, we can isolate stable trends and enter on momentum thrusts (RSI), exiting only when the trend's 'breathing cycle' (Gator) indicates exhaustion.

Components

• Daily High Low MTF (regime) — Sets the structural boundaries; trades are only valid when price is operating within or reacting to the previous day's range extremes.
• MA Channel Band (L'mas System) (direction) — Filters out counter-trend signals by requiring both price and a fast MA to be outside a slow channel.
• Relative Strength Index (RSI) (entry) — The final execution trigger; captures the momentum thrust following a structural and trend-based setup.
• Gator Oscillator (Standard) (exit) — Used to identify the 'sated' phase of the market; exits when the histograms show convergence (shortening) after an expansion.
• Average True Range (NNFX Version) (risk) — Provides a volatility-adjusted stop loss and determines the position size to maintain constant dollar risk.
• Stochastic Oscillator (confirmation) — Acts as a momentum pre-filter to ensure price is recovering from a local extreme before the RSI trigger.
• Standard Error of Regression (STDERR) (volatility_filter) — Quantifies trend quality; high standard error indicates price is deviating wildly from its linear path (noise), while low error suggests a stable, tradable move.

Known failure conditions

• Consecutive stop-outs during high-impact news where STDERR fails to spike before the move.
• Price remains pinned to the Daily High/Low for extended periods, causing the L'mas filter to lag and trigger late.
• Gator Oscillator remains 'eating' (double green) while price reverses sharply due to exogenous shocks.

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