Recursive Momentum FVG Trailer

Family: trend_following · Regime: trending · Complexity: medium · Asset classes: FX, Equities, Crypto indices · Timeframes: M15, H1, H4

Thesis

Market trends are driven by institutional imbalances that manifest as Fair Value Gaps. These gaps act as magnets for short-term mean reversion before the prevailing long-term trend (identified by Trend Intensity and Recursive Smoothing) resumes. Edge is found in entering 'the gap fill' only when verified by zero-lag momentum.

Components

• Trend Intensity Index (TII) (regime) — Filters out low-volatility and range-bound noise by requiring a momentum threshold.
• Recursive Moving Average Unlimited (direction) — Provides a hyper-smoothed trend direction; crossovers of its iterations determine the primary bias.
• Fair Value Gap (FVG) Indicator (entry) — Acts as the high-conviction entry trigger when price 'sweeps' or fills an imbalance during a pullback.
• Pivot Points (Classic) (exit) — Used as objective, structurally sound target levels (R1/R2/S1/S2) to capture intraday liquidity.
• Parabolic SAR (risk) — Used for dynamic trailing stop-loss that accelerates with price momentum.
• Zero Lag Least Squares Moving Average (ZLSMA) (confirmation) — Confirms short-term trend alignment with minimal lag to ensure momentum is resuming after a gap fill.

Known failure conditions

• Prolonged periods where price remains within a Tight Trading Range (TTR) without hitting TII thresholds.
• Repeated FVG formations that are immediately negated by opposing price action (indicates lack of liquidity depth).
• High frequency of SAR-flips prior to hitting first Pivot Point level.

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