Multi-Timeframe Momentum Alignment with Stochastic Entry Signals
Summary
This strategy requires directional agreement across three configurable timeframes before considering a trade. Each timeframe receives a bullish, bearish, or neutral score using either RSI with a neutral band or the slope of an exponential moving average. Once all three agree, a chart-timeframe stochastic crossover must also align with a linearly smoothed stochastic from the slowest timeframe to trigger an entry.
Trade size is calculated from a chosen fraction of equity and the ATR-based stop distance. Initial stops and targets use separate ATR multiples, while an optional early exit closes a position if the full momentum stack reverses. The script includes visual summaries of timeframe bias and entry signals. These are rule descriptions rather than evidence of profitability: the document provides no backtest results, and outcomes depend on timeframe selection, indicator settings, execution costs, and the assumptions behind risk-based sizing.
Key ideas
- Three timeframes must all score bullish or bearish before an entry is allowed.
- Momentum direction can be measured with RSI and a neutral zone or with EMA slope.
- A stochastic crossover on the chart timeframe must agree with the smoothed slow-timeframe stochastic.
- Position size scales with equity risk and ATR stop distance, with ATR-based targets and stops.
- An optional early exit responds to a complete reversal in the momentum stack, but no performance results are provided.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.