Ghost Moving Average and Momentum with Fibonacci Targets and Stops

Summary

This strategy combines a responsive Ghost Moving Average (GMA), normalized momentum, and Fibonacci price levels. The GMA is calculated from weighted moving averages: twice a half-length WMA minus a full-length WMA, smoothed with a WMA whose length is the square root of the original period. Its slope indicates trend direction, while momentum is the price change over a lookback period, smoothed by an EMA and normalized by standard deviation.

A long signal occurs when price crosses above the GMA while normalized momentum is positive; a short signal requires a cross below with negative momentum. The method derives target levels at 0.618, 1.0, and 1.618 and a stop level at 0.382 from the recent high-low range. The document also describes a dashboard for displaying trends, signals, and trade levels, but reports no performance results. It warns of whipsaws in ranging markets, parameter sensitivity, delayed trend detection, and potential forward bias in historical Fibonacci calculations. Backtesting and dynamic adjustments are suggested, but no validation evidence is provided.

Key ideas

• The GMA uses weighted moving averages to respond more quickly to price changes than a conventional moving average.
• Long and short entries require both a GMA crossover and momentum confirmation in the same direction.
• Fibonacci levels derived from a recent high-low range define proposed targets and a stop level.
• Ranging conditions may generate repeated crossover signals, and results may depend heavily on parameter choices.
• The document flags possible forward bias in the historical calculation of Fibonacci levels.

Tags

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