OPEN-SOURCE SCRIPT

Mismatch Strategy | Madrimov trade

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Title

Mismatch Strategy by Madrimov trade – Gold vs DXY Impulse and Compression

Description

Concept

This indicator is based on a cross-market mismatch principle between Gold (XAUUSD) and the US Dollar Index (DXY).
It looks for situations where DXY expands aggressively while Gold temporarily fails to respond, creating a build-up of directional pressure that is often released once Gold breaks its short-term range.

Methodology (High-Level Overview)

The script evaluates three conditions on the same chart timeframe:

DXY Impulse Detection
A directional impulse on DXY is detected when the candle’s range exceeds a multiple of its ATR, indicating unusually strong participation rather than normal fluctuation.

Gold Compression Filter
At the same time, Gold must remain compressed, defined as a candle range significantly smaller than its own ATR.
This represents under-reaction or absorption despite external pressure.

Delayed Breakout Confirmation
Trades are triggered only after the mismatch occurs and Gold subsequently breaks its recent high or low over a configurable lookback period.
This delay avoids chasing impulses and focuses on release after compression.

Why This Is Different

Unlike traditional trend or correlation indicators, this script does not trade direction directly.
Instead, it evaluates effort versus response across two related markets, filtering out low-quality momentum and false breakouts.

The strategy focuses on:

Cross-asset pressure imbalance

Volatility-normalized conditions

Sequential confirmation rather than instant signals

How to Use

Designed primarily for XAUUSD charts

Works best on intraday timeframes (5m–15m)

Signals are strongest when aligned with higher-timeframe bias

Buy and sell signals are plotted directly on candles

Optional RR visualization can be enabled for reference

Limitations

Not predictive; signals are generated after candle close

Performance degrades during extremely low-liquidity or news-driven spikes

Intended as a decision-support tool, not a standalone trading system

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