Trend EMA ADX Trend-Following
Exponential Moving Average Crossover with ADX Confirmation
Entry Logic
- BUY: EMA(50) crosses above EMA(200) AND ADX > 25
- SELL: EMA(50) crosses below EMA(200) AND ADX > 25
Why It Works
The 50/200 EMA crossover captures major trend shifts. The ADX filter ensures we only trade when there is genuine trend strength, avoiding whipsaws in choppy markets. This combination filters out approximately 40% of false signals compared to naked crossover systems.
Risk Profile
Best Regime
Performs best in Trending_HighVol and Trending_LowVol regimes. Should be suppressed during Ranging conditions where crossovers produce frequent false signals.
Range Bollinger Mean Reversion
Bollinger Band Mean Reversion with RSI Oversold Filter
Entry Logic
- BUY: Price touches lower Bollinger Band AND RSI < 30
- SELL: Price touches upper Bollinger Band AND RSI > 70
Why It Works
In ranging markets, price oscillates between statistical boundaries. Bollinger Bands define the 2-standard-deviation envelope, and RSI confirms oversold/overbought extremes. The double confirmation reduces entries during trend continuations disguised as extremes.
Risk Profile
Best Regime
Performs best in Ranging_LowVol and Ranging_HighVol regimes. Should be suppressed during strong trends where mean reversion leads to trading against momentum.
Trend Donchian Trend-Following
Donchian Channel Breakout Strategy
Entry Logic
- BUY: Price closes above 20-period Donchian Channel high
- SELL: Price closes below 20-period Donchian Channel low
Why It Works
The Donchian Channel breakout is one of the oldest and most robust trend-following methods (used by the original Turtle Traders). It captures momentum when price breaks through established highs or lows, indicating new directional conviction. The 20-period lookback balances responsiveness with noise filtration.
Risk Profile
Best Regime
Thrives in Trending_HighVol regimes where breakouts lead to sustained moves. Less effective in low-volatility ranging conditions where breakouts often fail.
Range Stochastic Mean Reversion
Stochastic Oscillator Oversold/Overbought Bounce
Entry Logic
- BUY: Stochastic %K crosses above %D in oversold territory (< 20)
- SELL: Stochastic %K crosses below %D in overbought territory (> 80)
Why It Works
The Stochastic oscillator measures closing price relative to the high-low range. When %K crosses %D in extreme zones, it signals momentum shifting from exhaustion back toward the mean. This works reliably in range-bound markets where price oscillates between support and resistance.
Risk Profile
Best Regime
Optimal in Ranging_LowVol conditions. In trending markets, the oscillator can remain in extreme zones for extended periods, generating premature reversal signals.
The Qualification Process
Every strategy above passed through the Layer 0 qualification engine. Here is what each strategy had to prove:
- Statistical Significance: A minimum of 20 trades to rule out luck
- Positive Expectancy: Average trade outcome must be profitable (edge exists)
- Profit Factor > 1.15: Gross profit must exceed gross loss by at least 15%
- Standardized Risk: All strategies tested with identical 1.0 ATR SL / 2.0 ATR TP profile
- Multi-Asset: Tested across EUR/USD, GBP/USD, and USD/JPY independently
Strategies that fail qualification are not discarded—they are logged with diagnostic metrics and returned to the research pipeline for potential refinement.