Momentum Oscillator with a Moving Base-Level Signal

Summary

Momentum 2.0 normalizes a price momentum oscillator by its standard deviation and smooths the result with linear regression. It then compares the smoothed oscillator with a moving base level, calculated as the negative long-term exponential average of normalized momentum. A cross above that level is interpreted as bullish, while a cross below it is bearish. The idea is to make signal thresholds responsive to the prevailing momentum regime rather than rely on a fixed zero line.

The document says the moving base level is intended to reduce false signals by shifting below zero in uptrends and above zero in downtrends. It provides indicator settings and describes a BTC/USDT futures sample at a 30-minute chart interval, but reports no test metrics or outcomes. The description does not establish that the approach improves results, and the signals may still lag or misfire as regimes change. The backtest excerpt also sets a minimum base-level window that should be considered when reproducing the method.

Key ideas

• The momentum reading is scaled by its standard deviation over a long window.
• Linear regression smoothing is applied to the normalized oscillator before signals are evaluated.
• The base level is the negative exponential average of normalized momentum, allowing the threshold to move with the regime.
• Crosses above and below the base level produce bullish and bearish signals, respectively.
• The published BTC/USDT futures settings are not accompanied by performance results.

Tags

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