PSAR-SuperTrend Momentum Convergence

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: FX, Equities, Indices · Timeframes: H1, H4, D1

Thesis

The strategy assumes that market trends exhibit 'momentum inertia' where price corrections (RSI oversold) within a confirmed volatility expansion (SuperTrend/MA-Candlesticks) are temporary pauses before the move resumes. The Parabolic SAR provides the accelerating exit necessary to capture the meat of the move while protecting against sudden reversals common in late-stage trends.

Components

• SuperTrend MT5 (FxGeek) (regime) — Identifies the primary volatility-adjusted trend direction to ensure trades align with the dominant path of least resistance.
• Momentum (direction) — Confirms that the price action is accelerating in the direction of the SuperTrend, reducing entries into fading moves.
• Relative Strength Index (RSI) (entry) — Acts as a trigger by identifying short-term mean-reversion exhaustion (oversold in uptrend) to enter on pullbacks.
• MACD (exit) — Captures the momentum shift against the trade to exit before the primary trend fully reverses.
• Parabolic SAR (risk) — Provides a non-linear, accelerating trailing stop that tightens as the move matures.
• MA-Candlesticks (volatility_filter) — Filters out low-volatility 'noise' by requiring the current close to be outside the MA-smoothed candle range, ensuring participation only in high-conviction moves.

Known failure conditions

• Extended sideways price action leading to PSAR/SuperTrend whipsaws.
• High frequency of MACD exit signals occurring before the trade covers transaction costs.
• Structural breakdown in the historical correlation between volatility expansion and trend persistence.

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).