--- name: Donchian Strong Regime slug: donchian-strong-regime category: AI Engineering description: Donchian Strong Regime shorts breakdowns only when a strong-bear regime is confirmed by EMA separation, ADX, and recent downside momentum. It is used for trend-following bear moves and stays out of chop by design. github: "https://github.com/Superior-Trade/superior-skills/tree/main/skills/donchian-strong-regime" language: JavaScript stars: 207 forks: 9 install: "npx degit https://github.com/Superior-Trade/superior-skills/tree/main/skills/donchian-strong-regime ~/.claude/skills/donchian-strong-regime" installs_to: ~/.claude/skills/donchian-strong-regime source_path: skills/donchian-strong-regime/SKILL.md collection_size: 25 category_size: 3101 collection_url: "https://dirskills.com/collections/Superior-Trade/superior-skills" added: 2026-09-05T05:28:41.999Z last_synced: 2026-09-05T05:28:41.999Z canonical_url: "https://dirskills.com/skills/donchian-strong-regime" --- # Donchian Strong Regime Donchian Strong Regime shorts breakdowns only when a strong-bear regime is confirmed by EMA separation, ADX, and recent downside momentum. It is used for trend-following bear moves and stays out of chop by design. **Install:** ```bash npx degit https://github.com/Superior-Trade/superior-skills/tree/main/skills/donchian-strong-regime ~/.claude/skills/donchian-strong-regime ``` ## README # 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 ```python 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} # disable ROI; trailing + signal exits only 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=14) dataframe["ema_sep"] = ( (dataframe["ema50"] - dataframe["ema200"]) / dataframe["ema200"] ) dataframe["ret_30"] = dataframe["close"].pct_change(30) dataframe["regime_strong"] = ( (dataframe["ema_sep"] < -0.06) & (dataframe["adx"] > 25) & (dataframe["ret_30"] < -0.10) ) return dataframe def populate_entry_trend(self, dataframe: pd.DataFrame, metadata: dict) -> pd.DataFrame: cond = ( (dataframe["close"] < dataframe["lowest_24"]) & dataframe["regime_strong"] ) dataframe.loc[cond, "enter_short"] = 1 dataframe.loc[cond, "enter_tag"] = "donchian_strong_bear" return dataframe def populate_exit_trend(self, dataframe: pd.DataFrame, metadata: dict) -> pd.DataFrame: cond = ( (dataframe["close"] > dataframe["highest_6"]) | ((dataframe["rsi"] > 55) & (dataframe["rsi"].shift(1) > 55)) ) dataframe.loc[cond, "exit_short"] = 1 return dataframe ``` ## Reference config ```json { "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", "entry_pricing": {"price_side": "same", "price_last_balance": 0.0}, "exit_pricing": {"price_side": "same", "price_last_balance": 0.0}, "pairlists": [{"method": "StaticPairList"}] } ``` ## 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.