Combined Momentum MA (Equal-Length EMA/SMA Crossover)

14. Feb. 2021

Overview:

• This momentum and trend-following strategy captures the majority of any trending move, and works well on high timeframes.
  
• It uses an equal-period EMA and SMA crossover to detect trend acceleration/deceleration, since an EMA places a greater weight and significance on the most recent data.
  
• To reduce noise and optimize entries, we combined this with an overall trend bias for further confluence.
  

How it works:

• Signals are determined by the crossover of an EMA and SMA of the same length, e.g. EMA-50 and SMA-50.
  
• The overall trend bias is determined using a slower SMA golden/death cross, e.g. SMA-50 and SMA-100.
  
• The signal is stronger when it occurs in confluence with the overall trend bias, e.g. when EMA-50 crosses over SMA-50, while above the SMA-100. This is analogous to only opening long positions in a bull market.
  

Indicator description:

• GREEN: Up Trend (EMA is above SMA, while EMA is above BIAS_MA. This shows a bullish confluence.)
  
• YELLOW: No Trend (EMA/SMA crossover and BIAS_MA are not in confluence.)
  
• RED = Down Trend (EMA is below SMA, while EMA is below BIAS_MA. This shows a bearish confluence.)
  

22. Apr. 2021

Versionshinweise

YELLOW has been refined to show when both Momentum MAs are above or below the BIAS_MA:

• OLIVE: Both EMA and SMA are above BIAS_MA, meaning the overall trend is bullish, however EMA is below SMA, meaning the short term momentum is bearish.
  
• ORANGE: Both EMA and SMA are below BIAS_MA, meaning the overall trend is bearish, however EMA is above SMA, meaning the short term momentum is bullish.
  
• YELLOW: EMA is above BIAS_MA, while SMA is below BIAS_MA, and vice versa.