Recursive Structural Momentum Framework (Chan-MLP)

Family: hybrid · Regime: trending · Complexity: high · Asset classes: Equities, Forex, Crypto · Timeframes: H1, H4, D1

Thesis

The hypothesis is that markets move in recursive structural units ('Hubs') and that the '2nd' and '3rd' types of Chan Lun entries identify the exact moment price transitions from a consolidation hub back into a momentum trend, which can be verified by a neural network's processing of the Close Location Value.

Components

SuperTrend & Pivots (regime) — Defines the primary trend bias and ensures entries occur relative to daily floor pivots to avoid buying into resistance.
Neural Network Indicator (NNind) (direction) — Provides a non-linear momentum filter to confirm that the price action (CLV) is accelerating in the direction of the structural signal.
Chan Lun Engine (MT4 DLL version) (entry) — Identifies recursive '2nd' and '3rd' type entries, which represent the first pullback after a hub (Zhongshu) break and a subsequent trend continuation.
MA Channel (Framework Version) (exit) — Acts as a trailing volatility-adjusted stop-out; when the Trend counter flips (crosses 0), it signifies a mean reversion or trend breakdown.
Murrey Math Line X (risk) — Provides discrete, non-subjective support and resistance levels for hard stop placement and risk-to-reward calculations.
Bollinger Bands (volatility_filter) — Used to prevent entries during low-volatility 'squeezes' where Chan Lun signals are prone to failure due to lack of expansion.

Known failure conditions

Price remains inside the EMA 144 channel for more than 50 bars (prolonged ranging).
Murrey Math levels shift frequently (more than once per 10 bars), indicating the 'Octave' is too small for the current volatility.
Chan Lun '2nd Buy' labels disappear retroactively on more than 30% of signals.

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