Corrected Momentum for Filtering False Signals
Summary
The document describes a modified momentum indicator that adds a correction period to make momentum readings less prone to false signals. It says that setting the correction period below zero reproduces ordinary momentum, with a 100-point adjustment when comparing its values with a built-in momentum indicator. The corrected reading can also be compared with the original momentum as a signal line.
The indicator offers alerts for crossings of outer or middle levels, changes in slope, and crossings between corrected and original momentum. Its default parameters are intended to combine momentum with a short-term trend view. The document provides no formula, chart examples, backtest, or performance evidence, so it does not establish whether the correction reliably reduces false signals. It recommends experimenting with parameters; any practical use would require testing the settings and alert behavior on the intended market and timeframe.
Key ideas
- A correction period is added to momentum to try to filter false signals.
- A negative correction period is described as equivalent to ordinary momentum after adjusting its scale by 100.
- The corrected and original momentum values can be compared to generate a crossing signal.
- Alerts can respond to level crossings, slope changes, and crossings between the corrected and original values.
- The document gives no test results, so the claimed signal improvement needs independent evaluation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.