Recursive Fractal Strength Momentum
Family: trend_following · Regime: trending · Complexity: high · Asset classes: Forex · Timeframes: H1, H4
Thesis
The strategy operates on the hypothesis that currency trends are most persistent when there is a fundamental divergence in aggregate strength across major pairs (measured by FXTSI). By filtering these trends through three moving average envelopes (XARD) and using high-iteration recursive smoothing (RMA), we isolate 'high-conviction' momentum. The fractal-adaptive exit (FRAMA) is used to capture the maximum trend duration by adjusting to the market's fractal dimension, exiting only when the trend loses its efficiency.
Components
- Forex True Strength Index (FXTSI) (regime) — Identifies the highest probability currency pair by measuring aggregate relative strength/weakness across 28 pairs.
- XARD Channel (direction) — Ensures multi-timeframe trend alignment. Entry only occurs when all three MA envelopes (9, 36, 144) agree on the trend direction.
- Recursive Moving Average Unlimited (entry) — Provides a noise-filtered trigger. The high iteration count creates a 'stable' line that requires significant momentum to cross.
- Ehlers Fractal Adaptive Moving Average (FRAMA) (exit) — Adapts its smoothing factor based on market complexity; exits early when the 'fractal dimension' suggests a trend is becoming chaotic or ranging.
- Daily High Low MTF (risk) — Uses structural market extremes (Previous Day High/Low) to define invalidation points and calibrate position size.
Known failure conditions
- FXTSI divergence: Base and Quote currencies both move above 0, indicating broad market volatility rather than specific pair strength.
- Recursive MA Overshoot: In vertical blow-off tops, the RMA will lag significantly, making the first cross-back far too late for a profitable exit (hence the FRAMA safeguard).
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