Smoothed Volume-Trend Hybrid (SVTH)

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

Thesis

Market participants react to volume-backed momentum only after structural trend confirmation (Ichimoku Cloud) is established. By using the Ehlers SuperSmoother to filter out 1st-order noise and ZLSMA to reduce signal lag, we can identify high-conviction entries during the 'heart' of a move. Filtering out macro news events reduces the probability of being stopped out by non-technical volatility spikes.

Components

• Ehlers SuperSmoother Filter (regime) — Used as a regime filter; price must be on the correct side of the filter to ensure we are not trading against short-term smoothed momentum.
• Ichimoku Kinko Hyo (direction) — Provides the primary trend direction and structural support/resistance. The Cloud acts as the 'sea level' for the trade.
• Money Flow Index (MFI) (entry) — Triggers the entry by identifying volume-backed momentum recoveries from oversold/overbought levels within a trend.
• Donchian Channels (exit) — Acts as a trailing exit and stop-loss reference; trailing the lower (long) or upper (short) band to capture extended trend runs.
• News Indicator NMNNFX (risk) — Risk mitigation by preventing entry during or immediately before high-impact news releases to avoid slippage and erratic spreads.
• Zero Lag Least Squares Moving Average (ZLSMA) (confirmation) — Filters out low-velocity price action. Price must be above (long) or below (short) ZLSMA to confirm high-order trend integrity.

Known failure conditions

• Extended periods of low-volume consolidation where MFI oscillates without trend follow-through.
• Failure of the Donchian trail to capture profits during 'V-top' reversals.
• Incompatibility of external news data files leading to missing risk-off windows.

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