USDX-Darvas Institutional Breakout

Family: hybrid · Regime: trending · Complexity: medium · Asset classes: Forex (USD Pairs) · Timeframes: H1, H4

Thesis

The strategy assumes that significant Forex movements are driven by a 'Dollar Regime'. If the US Dollar Index (USDX) shows a clear macro trend, breakouts from consolidation (Darvas Boxes) in individual pairs that align with this regime and show institutional footprints (FVGs/OBs) represent high-probability trend continuations rather than false breakouts. The edge lies in the confluence of macro-currency strength and local price structure.

Components

USDX (US Dollar Index) Tracker (regime) — Acts as the macro regime filter; identifies if the US Dollar is in an expansion or contraction phase relative to its 13/17 EMA crossover.
MACD Classic (direction) — Provides momentum alignment to ensure the breakout has sufficient velocity.
Darvas Boxes (Multi-Mode) (entry) — Identifies price consolidation boundaries and signals the high-probability breakout point from those ranges.
UT Bot Alerts (MQL5) (exit) — Provides a trailing exit mechanism that reacts to volatility-adjusted price reversals.
ATR SL Finder (risk) — Calculates the initial stop loss distance based on current market volatility to avoid premature stop-outs.
Order Block / FVG Detector (confirmation) — Confirms the breakout is supported by institutional liquidity footprints (FVG or OB) within the breakout window.
TMA Risk Panel (volatility_filter) — Calculates precise position sizing based on the ATR SL distance and account equity.

Known failure conditions

USDX remains flat/correlated tightly with the target pair while MACD whipsaws.
Breakout occurs without any FVG/OB detection within a 5-bar lookback window.
Constituent USDX pairs (e.g., SEK, CHF) exhibit extreme idiosyncratic volatility unrelated to USD strength.

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