Log-Normalized Cyclical Momentum Hybrid
Family: hybrid · Regime: trending · Complexity: high · Asset classes: Equities, Forex, Crypto · Timeframes: H1, H4, D1
Thesis
Markets exhibit 'energy' bursts where volatility and trend direction align. By using Log-transformation to normalize these bursts and a Bandpass Filter to isolate the cycle of price, we can identify pullbacks (via Stochastic) within high-momentum regimes (Frankenstein ATM) while scaling risk based on how 'erratic' the price is relative to its mean (RAE).
Components
- Logarithmic Transformation (LOG) (regime) — Regime: Stabilizes variance across price levels, providing a normalized foundation for the Frankenstein ATM volatility filter.
- Extrem SuperTrend (direction) — Direction: Establishes the macro-trend bias based on ATR-adjusted median prices.
- Stochastic Oscillator (entry) — Entry: Identifies mean-reversion impulses (oversold/overbought) within the established trend.
- ATR Stop Loss Finder (exit) — Exit: Provides a volatility-adjusted trailing stop to lock in gains or exit when the short-term expansion reverses.
- Relative Absolute Error (RAE) (risk) — Risk: Measures the stability of price relative to its mean to dynamically scale position sizes; higher RAE (unstable error) implies lower conviction/size.
- Bandpass Filter (BPF) (confirmation) — Confirmation: Isolates cyclical momentum to ensure the Stochastic entry isn't just noise but a significant frequency-aligned swing.
- Frankenstein Ultimate Pro - ATM Logic (volatility_filter) — Volatility Filter: Uses TEMA and Linear Regression to ensure momentum is accelerating and price is above/below the 80-period trend baseline.
Known failure conditions
- Price enters a tight horizontal bracket where the Bandpass Filter oscillates rapidly around zero without trend progression.
- LOG-transformed volatility drops below the threshold required for the Frankenstein ATM logic to trigger entries.
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).