Sunday Gap Cycle-Momentum Hybrid

Family: hybrid · Regime: trending · Complexity: high · Asset classes: FX, Indices · Timeframes: H1, H4

Thesis

Weekend gaps represent fundamental sentiment shifts that set the weekly tone. By combining this regime filter with Ichimoku's equilibrium zones and DeMark's REI velocity, we can identify high-conviction momentum bursts. Using Ehlers DSP as an exit mechanism allows the strategy to capture the bulk of a price cycle while exiting before the inevitable trend correction, which standard trend-following indicators (like moving average crosses) often miss.

Components

• Sunday Opening Gap (regime) — Establishes the weekly bias; gaps signify institutional positioning over the weekend that dictates the directional regime for the first half of the week.
• Ichimoku Kinko Hyo (direction) — Acts as a primary trend filter; price must be on the correct side of the Kumo (Cloud) to ensure the trade aligns with multi-period equilibrium.
• Range Expansion Index (REI) (entry) — Uses DeMark's logic to enter on momentum 'velocity' rather than just price level, filtering out stagnant price action.
• Ehlers Detrended Synthetic Price (DSP) (exit) — Identifies cycle exhaustion; exits trades when the price cycle reaches a peak/trough, regardless of the underlying trend.
• Roshaneforde Pivot Levels (risk) — Provides structural support/resistance based on recent engulfing patterns for hard stop placement and risk-based sizing.
• DEMA 200 & ADX Combined HUD (confirmation) — Confirms high-strength trend presence via ADX and long-term bias via the DEMA 200.

Known failure conditions

• The Sunday Gap is closed and price trends aggressively in the opposite direction for >48 hours.
• ADX remains below 20 for more than 3 consecutive sessions (prolonged range).
• The DSP cycle period (40) fails to capture the dominant market rhythm, leading to premature exits.

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).