Combining MACD and Momentum for Long Entries

Summary

This strategy combines MACD and price momentum into a single comparison signal. It calculates momentum as the difference between the selected source and that source ten bars earlier. It also forms adjusted fast and slow averages by adding momentum and smoothed deviations to their respective averages, then compares their difference with the conventional fast-minus-slow MACD spread. A long position opens when the resulting delta crosses above zero, and all positions close when it crosses below zero. The stated defaults include MACD lengths of 12 and 26, a momentum length of 10, and signal smoothing of 14; entries and exits can be limited to a chosen date window.

The document supplies indicator formulas and code, but no market, timeframe, backtest results, or evidence of profitability. Its accompanying author text describes combining the indicators and asks for help with their display scales, so the material is partly exploratory. The rules are long-only and provide no explicit stop loss, position sizing, or transaction cost treatment. Any assessment would require independent testing and attention to those omissions.

Key ideas

• Momentum is calculated as the source value minus its value ten bars earlier.
• A long entry occurs when the combined momentum and MACD delta crosses above zero.
• The strategy closes all positions when the delta crosses below zero.
• The stated defaults use MACD lengths of 12 and 26 and signal smoothing of 14.
• No market, timeframe, test results, stop loss, or position sizing method is provided.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.