Momentum Thresholds with Average Crossovers for Entry Signals
Summary
The document describes a simple indicator that combines momentum thresholds with crossovers between momentum and a smoothed momentum average. It calculates momentum over a 20-period lookback and smooths that series with a Wilder average using a 5-period setting. The displayed parameters also include upper and lower momentum thresholds and an arrow offset for chart plotting.
A bullish arrow is drawn when momentum is below the negative lower threshold and the average crosses below momentum. A bearish arrow is drawn when momentum exceeds the upper threshold and the average crosses above momentum. The author presents the indicator as a starting point that could be improved. No market, bar interval, entry or exit rules, risk controls, or test results are specified, so the signals alone do not establish a complete strategy or demonstrate profitability. The thresholds and smoothing settings may require calibration for the instrument and data being used.
Key ideas
- The indicator combines a momentum oscillator with a smoothed version of that oscillator.
- A bullish marker requires low negative momentum and the average crossing below momentum.
- A bearish marker requires high positive momentum and the average crossing above momentum.
- The document gives example parameter settings but no testing evidence or complete trade management rules.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.