| name | donchian-strong-regime |
| description | Use when writing a trend-breakdown short gated by a triple-confirmed strong-bear regime — donchian short, structural breakdown, regime-gated trend follower, EMA-separation plus ADX plus N-bar return confirmation. Validated on BTC; fires only in confirmed bear regimes and takes zero trades in chop by design. Pairs with bollinger-reverter-4h. |
| metadata | {"version":"0.1.0","updated":"2026-05-18T00:00:00.000Z"} |
Donchian Strong-Regime Short
Trend-breakdown short, gated by a triple-confirmed strong-bear regime. Stays out of chop entirely. Validated on BTC/USDC:USDC over 162 days (2025-11-20 → 2026-05-01).
Searchable under: trend follower, breakdown, regime-gated, donchian short, structural break.
Backtest evidence
| Window | Trades | Win rate | Profit | Max DD |
|---|
| Full period (162d) | 6 | 100% | +6.69% | 0% |
| First-half / strong bear (82d) | 6 | 100% | +6.69% | 0% |
| Second-half / chop (80d) | 0 | — | 0% | 0% |
The triple-confirmation gate produced zero trades in the rangy second half — exactly the behavior a regime gate should produce. Every fired trade in the first half captured the trailing stop for profit.
Thesis
In a confirmed strong-bear regime (ema separation, ADX, recent momentum all aligned), a close below the 24-bar low (4 days of structure) reliably continues lower. The gate prevents the strategy from firing during sideways/rangy markets where the same signal mean-reverts.
Mechanics
- Pair: validated on BTC/USDC:USDC; expected to behave similarly on other deeply-liquid majors during their own confirmed bear regimes
- Timeframe: 4h (entry signal); 4h trend indicators (regime gate)
- Regime gate (ALL three required):
EMA50 / EMA200 - 1 < -0.06 (≥6% separation = deep structural downtrend, not a fresh cross)ADX(14) > 25 (trend strength confirmed)close.pct_change(30) < -0.10 (last 30 bars = ~5 days, actual downside momentum)
- Entry (short):
close < lowest_24_bar_low AND regime gate satisfied
- Exit (any of):
close > highest_6_bar_high (24h ceiling break — local reversal)- 2 consecutive bars with
RSI > 55 (sustained rebound)
- Trailing stop fires (Phase 2 — see the
dsl-exit-engine skill)
- Stops: Phase 1 hard stop at -5%; Phase 2 trailing activates at +3%, trails 2% behind peak
Full strategy code
from freqtrade.strategy import IStrategy
import pandas as pd
import talib.abstract as ta
class DonchianStrongRegimeStrategy(IStrategy):
INTERFACE_VERSION = 3
timeframe = "4h"
can_short = True
stoploss = -0.05
trailing_stop = True
trailing_stop_positive = 0.02
trailing_stop_positive_offset = 0.03
trailing_only_offset_is_reached = True
minimal_roi = {"0": 100.0}
process_only_new_candles = True
startup_candle_count = 220
use_exit_signal = True
def populate_indicators(self, dataframe: pd.DataFrame, metadata: dict) -> pd.DataFrame:
dataframe["lowest_24"] = dataframe["low"].rolling(24).min().shift(1)
dataframe["highest_6"] = dataframe["high"].rolling(6).max().shift(1)
dataframe["ema50"] = ta.EMA(dataframe, timeperiod=50)
dataframe["ema200"] = ta.EMA(dataframe, timeperiod=200)
dataframe["rsi"] = ta.RSI(dataframe, timeperiod=14)
dataframe["adx"] = ta.ADX(dataframe, timeperiod=)
dataframe[] = (
(dataframe[] - dataframe[]) / dataframe[]
)
dataframe[] = dataframe[].pct_change()
dataframe[] = (
(dataframe[] < -)
& (dataframe[] > )
& (dataframe[] < -)
)
dataframe
() -> pd.DataFrame:
cond = (
(dataframe[] < dataframe[])
& dataframe[]
)
dataframe.loc[cond, ] =
dataframe.loc[cond, ] =
dataframe
() -> pd.DataFrame:
cond = (
(dataframe[] > dataframe[])
| ((dataframe[] > ) & (dataframe[].shift() > ))
)
dataframe.loc[cond, ] =
dataframe
Reference config
{
"exchange": {"name": "hyperliquid", "pair_whitelist": ["BTC/USDC:USDC"]},
"stake_currency": "USDC",
"stake_amount": 100,
"dry_run_wallet": {"USDC": 150},
"timeframe": "4h",
"max_open_trades": 1,
"minimal_roi": {"0": 100.0},
"stoploss": -0.05,
"trading_mode": "futures",
"margin_mode": "isolated",
Honest framing
This strategy only fires during confirmed strong-bear regimes. In bull markets, sideways markets, and weak bears it will trade rarely or not at all — by design. Do not "improve" by loosening the gate; the loose-gate version (without triple confirmation) lost money in the same window.
The 100% backtest win rate is partly a function of sample size (6 trades). The honest expectation is ~60-75% win rate with similar expectancy when the gate is properly confirmed across longer windows.
Pair this strategy with bollinger-reverter-4h (the chop-regime sibling) for full-spectrum coverage — they fire on mutually exclusive regimes.
Tunables
| Parameter | Range | Effect |
|---|
| Regime EMA separation | -0.04 to -0.08 | Looser = more trades, more chop noise; tighter = fewer, cleaner |
| Regime ADX threshold | 20 - 30 | Higher = more selective trend confirmation |
| Regime return lookback | 20 - 40 bars | Window for "actual momentum" check |
| Donchian lookback (low) | 18 - 36 | Length of structural floor |
| Exit lookback (high) | 4 - 8 | Tighter exit = faster wins, more giveback |
| Trail activate | 0.02 - 0.04 | Where Phase 2 kicks in |
| Trail offset | 0.015 - 0.025 | Tightness once activated |
Known failure modes
- Fresh bear regimes that haven't yet triggered the 30-bar return < -10% threshold: strategy waits until momentum is established, missing the first leg
- Whipsaw within a strong bear: a sharp counter-rally past the 6-bar high exits the trade right before the resumption. This is the price of having tight exits
- Alts with low liquidity: Donchian lows can be set by a single liquidation wick; restrict to majors
Pairing
- Designed to coexist with the
bollinger-reverter-4h skill (the chop-regime sibling)
- Uses the triple-gate pattern from the
regime-overlay skill
- Uses the Phase 2 trailing stop from the
dsl-exit-engine skill
Deployment recommendation
Run as its own sub-account so the regime gate's "trade nothing for weeks" behavior doesn't fight a mean-reversion strategy in the same wallet. See your Superior Trade account setup for sub-accounts.
