LTC Hyperliquid 4H ZigZag Fibonacci Reverse Breakout with SAR Protection

Hypothesis

Derived by the Research Lead from MQL5 Code Base's ZZ Fibo Trader: test a return through a previously broken swing-boundary Fibonacci level, with Wilder Parabolic SAR trailing protection. The article supplies the reverse-breakout mechanism and SAR exit; the following causal swing construction, symmetric long/short interpretation, completed-bar signals and risk settings are Research Lead completions, not claims about the unavailable EA code. Trade LTCUSD.HYPERLIQUID on 4-HOUR bars. Use only confirmed swing points and freeze each setup's level; never trade retrospectively plotted ZigZag points. Submit market entries at the signal bar's close. Intrabar protective stops are matched by the platform. Baseline parameters are pivot_bars=5, reclaim_window_bars=6, sar_step=0.02 and sar_max=0.20.

The source mechanism governs selection despite unfavorable results from unrelated reversal strategies. Hyperliquid is underrepresented at 10.3% versus its 20% target, and long/short research addresses the 80.8% long-only concentration. LTC avoids repeating the recent LINK and DOGE specifications. Corpus concentration is empty, so LTC's recent experiment share cannot be asserted. Four-hour bars permit substantially longer Hyperliquid validation than sub-hourly bars. This is a confirmed-swing failed-breakout test, distinct from the failed SOL prior-day sweep fade. The retry brief does not identify a previously selected market; this contract explicitly binds LTC Hyperliquid and prevents subsequent venue substitution.

no_change: iteration 5 reproduced iteration 3 exactly (118 trades, Sharpe -0.3265917302566855) — the code change did not alter trading; nothing left for the analyst to judge

Implementation

Trades LTC Hyperliquid 4-hour confirmed-swing boundary failures in both directions. Frozen broken boundaries must be reclaimed within six bars; market entries receive intrabar SAR protection. Initial stop-distance risk is 0.5% of equity, with notional capped at 30% of equity.

The consistency validator requires every optimization-plan fixed value in parameters, including bar_interval; the 4-HOUR bar_type alone does not satisfy it. Added all exact fixed values and aligned the two sizing defaults with the research contract, preserving the previous signal and stop implementation. Feedback reports a configuration mismatch, not evidence against the edge. The required outbox file could not be written because this workspace permits read-only filesystem access; the complete task-bound JSON is returned here.

Verification Results

The sandbox reports -0.218% net return per trade across 118 closed positions. Modeled impact totals $9,713 and reported capacity is approximately $27,802; the analyst should examine sizing sensitivity and economics over full history. These smoke-test results do not establish a correctness failure.

Analysis

Before spending two hours optimizing signal parameters, run a size-only correction: change risk_fraction from 0.005 to 0.001 and max_notional_equity_fraction from 0.30 to 0.06, retaining pivot_bars=5, reclaim_window_bars=6, sar_step=0.02 and sar_max=0.20. This approximates a $20,000 sleeve within the standard funded account. Compare actual net per-trade economics, commissions, funding and modeled impact; adding back impact is only a diagnostic, not proof that smaller execution is profitable. Record frozen setup level, break time and reclaim time for sampled entries to verify mechanism alignment. Do not optimize unless corrected execution demonstrates positive economics. This review concerns the Research Lead's operationalization, not the unavailable original EA.

Iteration History

Verification failed (Layer 4 — QA review) [class=code_defect]: - [edge_concern] The sandbox reports -0.218% average net trade return across 118 closed positions, with substantial modeled impact. These are advisory economics concerns requiring full-history assessment. - [critical] Setup creation tests only whether swing_high - swing_low is positive. Once the first peak confirms, swing_high is positive while swing_low can still be its uninitialized value of zero. The strategy can then arm an upper-boundary breakout and enter short on its reclaim before any trough has confirmed. That trade uses an invented zero-price swing endpoint rather than the hypothesis's confirmed swing points. (line 104) — fix: Require both a confirmed high and a confirmed low, with swing_high > swing_low, before creating either setup. Use explicit confirmation flags or unset sentinels. Verify that a peak followed by a breakout and reclaim cannot trade until a trough has also confirmed.

Require both a confirmed high and a confirmed low, with swing_high > swing_low, before creating either setup. Use explicit confirmation flags or unset sentinels. Verify that a peak followed by a breakout and reclaim cannot trade until a trough has also confirmed.

Setup creation tests only whether swing_high - swing_low is positive. Once the first peak confirms, swing_high is positive while swing_low can still be its uninitialized value of zero. The strategy can then arm an upper-boundary breakout and enter short on its reclaim before any trough has confirmed. That trade uses an invented zero-price swing endpoint rather than the hypothesis's confirmed swing points.

Verification failed (Layer 1.5 — hypothesis/config consistency) [class=hypothesis_mismatch]: - optimization_plan fixes bar_interval at 4-HOUR

Outcome Summary

Code revisions must change trading behavior to provide new evidence for evaluating this losing baseline.

Iteration 5 exactly reproduced iteration 3's 118 trades and Sharpe despite a code change, triggering abandonment for unchanged trading behavior. Optimization and later review stages were not reached.

Trade LTC on Hyperliquid four-hour bars using reclaims of frozen Fibonacci swing boundaries from confirmed pivots, with Parabolic SAR protection.

The backtest returned -4.78% across 118 closed trades, with Sharpe -0.327 and maximum drawdown 7.68%. Average per-trade return was -0.224% of notional, and profit factor was 0.853.

Analysis

ZZ Fibo Trader

Backtest Review

Sharpe

-0.33

Total return

-4.78%

Max drawdown

7.68%

Trades

118

Win rate

37.3%

Profit factor

0.85