TrendEQ: Volatility-Adjusted Momentum and Overbought Signals
Summary
TrendEQ is described as a momentum indicator that adjusts its calculation for current volatility. Positive readings indicate upward momentum and negative readings indicate downward momentum. It also uses overbought and oversold thresholds to flag conditions that the document associates with possible price corrections or recoveries.
The listed settings include separate momentum and volatility periods, a scaling factor, and threshold levels. The document gives recommended or default settings, while noting that a longer momentum period smooths the curve but adds lag. It provides no formula, chart, test results, or comparison with other indicators, so the mechanics and predictive value cannot be independently assessed from this description. The overbought and oversold interpretations are presented as possibilities, not reliable forecasts, and would need validation across instruments and market conditions.
Key ideas
- TrendEQ adjusts momentum using current volatility.
- Positive and negative values are interpreted as bullish and bearish momentum, respectively.
- Overbought and oversold thresholds flag possible corrections or recoveries.
- A longer momentum period smooths the indicator but can increase lag.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.