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PROBLEM STATEMENT

Despite successfully optimizing momentum-based trading with Buy (BPL) & Sell (SPL) phases breaking & combinations, a critical issue remained: many big moves were being missed. While momentum time frame backing improved trade execution, we sought to determine whether further segmentation of Buy & Sell momentum would yield better results. However, the challenge was managing the increased volatility and drawdowns that came with capturing these larger market moves.

Proposed Solution

To address this, we tested a deductive approach—breaking timeframes further to enhance buy & sell momentum tracking. This aimed to:
✅ Capture larger market moves that were previously missed.
✅ Improve trade precision by refining time-based momentum shifts.
✅ Establish a transition from multi-directional to directional mechanical systems for enhanced efficiency.

Findings & Results

📊 Breakthrough Insights:

• The new framework captured stronger market trends but introduced heightened volatility.
• Drawdowns from peak increased significantly, a necessary trade-off for higher profitability.
• This was the first step toward building a directional mechanical system, marking a shift from traditional multi-directional models.

Conclusion & Next Steps

This study provided a structured pathway for transitioning into directional trading, proving that breaking timeframes into finer segments improved trade execution. The next phase of research will focus on managing drawdowns and refining risk controls while maintaining the benefits of capturing bigger moves.

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