AdaFourHourHammerReclaimAbsorptionLong

ADA 4H Hammer-Reclaim Absorption Long

Long-only ADA-USDT 4H strategy that enters when bar-shape geometry signals seller exhaustion (hammer-like bar with large lower wick and small bullish body) after a short-term pullback inside a confirmed long-term uptrend. The lower-wick fraction acts as an OHLCV-derivable proxy for taker absorption — sellers push intra-bar lows but buyers reclaim by close, indicating supply has been absorbed. Filtered by 200-SMA uptrend so we never fade a downtrend, and by a modest volume floor so we ignore low-conviction wicks. Distinct from prior ADA 4H strategies: not a classical indicator (RSI/MACD/SAR/Heikin-Ashi/Aroon/Keltner all failed), not a volume z-score reversion (already in pipeline as ADAVolumeSpikeMeanReversionLong), and not a Donchian/breakout. The mechanism is bar-geometry-based and has no overlap with prior pipeline entries.

Iteration-2 minimal fix for the Layer-2 failure '_sma() takes 2 positional arguments but 3 were given'. Root cause: _sma was a @staticmethod with signature (vals, n), but the Layer-2 _StrategyProxy rebinds strategy methods onto a stand-in object where the staticmethod descriptor is not preserved, so the call self._sma(self._close, self.sma_period) arrived with self prepended (3 args). Fix: convert _sma to a normal instance method def _sma(self, vals, n) so the 3 arguments (self + 2) bind correctly in both the proxy and the real engine. The call site, every entry/exit/sizing branch, the continuous signed-lower-wick signal, the imports, and the config are all unchanged, so Layer 1 stays green and the strategy now passes the synthetic scenarios that previously raised the TypeError before reaching the sandbox backtest.

Structural sparsity combined with a strongly negative edge — two independent disqualifiers, neither optimizable. The 7-condition hammer-geometry conjunction (lower-wick >=0.5, body <=0.35, upper-wick <=0.20, bullish, fresh 10-bar low, 200-SMA uptrend, volume floor) fires only 19 times over 6 years (exposure 1.38%), far too few to validate via walk-forward or to optimize without fitting 6+ parameters to noise. On those 19 trades the edge is strongly negative: profit_factor 0.42, Sharpe -3.69, expectancy -$1,486/trade, win rate 26%, losing in 5 of 6 years (only 2024 positive). The reckless 0.95 sizing (avg_position_pct 95.4%) amplifies the 30% drawdown but is not the fixable issue — smaller sizing scales a PF-0.42 signal without flipping its sign. Not iterate: loosening the geometry to manufacture more trades abandons the 'hammer absorption' mechanism itself, and the signal as specified has negative expectancy on ADA 4H, so no parameter change resolves a structurally rare trigger AND a negative-EV signal at once. FAILURE PATTERN: multi-condition single-bar candlestick-geometry reversals (hammer/absorption proxies) on a crypto alt 4H fire too rarely (~19 events in 6 years) to validate out-of-sample, and the OHLCV lower-wick 'absorption' proxy carries no real edge (PF 0.42) — bar-shape reversal signals are both too sparse and too weak to clear walk-forward, the same sparsity+weakness signature as the abandoned hammer/wick and single-bar pattern strategies.

Long-only ADAUSDT.BINANCE 4H bar-geometry strategy. Enters when a hammer-like bar (lower-wick fraction >= 0.5, body fraction <= 0.35, upper-wick fraction <= 0.20, bullish close) prints at a fresh 10-bar local low inside a 200-SMA uptrend with volume >= the 20-bar average. The lower-wick fraction is an OHLCV proxy for taker absorption. Exits on +8% take profit, -4% stop, a close below the 200-SMA (trend break), or an 18-bar time stop. leverage 1.0.

Verification failed (Layer 2 — synthetic scenarios): Parameters used: ['sma_period', 'min_notional', 'position_pct', 'vol_lookback', 'max_body_frac', 'max_hold_bars', 'stop_loss_pct', 'vol_floor_mult', 'take_profit_pct', 'pullback_lookback', 'max_upper_wick_frac', 'min_lower_wick_frac'] Check that __init__ sets all attributes from self.parameters.get(). - steady_uptrend: TypeError: AdaFourHourHammerReclaimAbsorptionLong._sma() takes 2 positional arguments but 3 were given (bar timestamp: 1735701660000) - steady_downtrend: TypeError: AdaFourHourHammerReclaimAbsorptionLong._sma() takes 2 positional arguments but 3 were given (bar timestamp: 1735701660000) - flat_ranging: TypeError: AdaFourHourHammerReclaimAbsorptionLong._sma() takes 2 positional arguments but 3 were given (bar timestamp: 1735701660000) - volatility_spike: TypeError: AdaFourHourHammerReclaimAbsorptionLong._sma() takes 2 positional arguments but 3 were given (bar timestamp: 1735701660000) - zero_volume: TypeError: AdaFourHourHammerReclaimAbsorptionLong._sma() takes 2 positional arguments but 3 were given (bar timestamp: 1735701660000) - price_gap: TypeError: AdaFourHourHammerReclaimAbsorptionLong._sma() takes 2 positional arguments but 3 were given (bar timestamp: 1735701660000)

Correctly implemented and trades as specified (19 long-only hammer-reclaim entries, clean gate, 0 dropped); novel bar-geometry mechanism distinct from prior ADA strategies

Structurally sparse: only 19 trades over 6 years (exposure 1.38%) — the 7-condition hammer-geometry conjunction is far too rare to validate via walk-forward or to optimize (6+ params vs 19 events)

Strongly negative edge: profit_factor 0.42, Sharpe -3.69, expectancy -$1,486/trade, win rate 26%, losing in 5 of 6 years

Reckless 0.95 sizing (avg_position_pct 95.4%) amplifies the 30% drawdown, but sizing is not the disqualifier — the signal is both too rare and negative-EV

metrics dominated by noise: Sharpe CI [-10.1, +1.3], probabilistic_sharpe 0.086 — the result is unreliable on 19 trades regardless

This strategy sought seller-exhaustion 'absorption' on ADA 4H by buying hammer bars that reclaimed a fresh local low inside a 200-SMA uptrend, pitched as a novel bar-geometry mechanism distinct from the failed indicator and volume-z-score families. It was implemented cleanly but the 7-condition conjunction fired only 19 times over six years and lost decisively when it did — profit factor 0.42, Sharpe -3.69, -28.4% return, losing in five of six years. The analyst abandoned it at the backtest-review gate on its second iteration for two independent reasons — structural sparsity and a negative edge, neither fixable by tuning — so it never advanced to optimization or risk review.

A multi-condition single-bar candlestick-geometry reversal on a crypto alt 4H is both too rare to validate (~19 events in 6 years) and too weak to pay (PF 0.42) — the OHLCV lower-wick 'absorption' proxy carries no real edge, the same sparsity-plus-weakness signature that sank prior hammer/wick single-bar patterns.

The backtest-review analyst issued an 'abandon' verdict on two independent disqualifiers: structural sparsity (the 7-condition hammer-geometry conjunction fires only 19 times in 6 years, far too few to validate via walk-forward or optimize 6+ parameters against) and a strongly negative edge (PF 0.42), neither of which is optimizable — loosening the geometry to get more trades would abandon the mechanism, and smaller sizing scales a PF-0.42 signal without flipping its sign.

A long-only bar-geometry strategy on ADAUSDT 4H Binance futures (1.0x leverage, 0.95 position fraction) entering on a hammer-like bar (lower wick ≥50% of range, small bullish body, short upper wick) printing at a fresh 10-bar low inside a 200-SMA uptrend with a volume floor — using the lower-wick fraction as an OHLCV proxy for taker absorption (sellers push the low, buyers reclaim by close).

Across only 19 trades over 6 years (1.38% exposure) it returned -28.4% with profit factor 0.42, Sharpe -3.69, expectancy -$1,486/trade, a 26.3% win rate and a 30.2% max drawdown, losing in 5 of 6 years; the Sharpe CI [-10.1, +1.3] and probabilistic Sharpe 0.086 mark the result as noise-dominated.