Anchored Momentum: Comparing Two Moving Averages
Summary
Anchored Momentum is a technical indicator attributed to Rudy Stefenel and introduced in 1998. It measures the percentage difference between two moving averages, with the result scaled by 100. The two averages can use different periods and calculation methods, and both are applied to a configurable price series.
The indicator also exposes upper and lower limits for a buffered zone, which can be used to interpret readings around chosen thresholds. The document describes the calculation and configurable inputs but gives no trading rules for interpreting the signal, performance evidence, or guidance for selecting parameter values. It therefore explains the indicator’s construction rather than establishing that it predicts returns or suits a particular market.
Key ideas
- Anchored Momentum compares two moving averages using their ratio.
- The difference is expressed as a percentage-like value by scaling it by 100 and subtracting one.
- Users can configure each moving average’s period and method, along with the applied price.
- Upper and lower buffered-zone limits are configurable, but the document does not specify how to trade them.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.