Momentum
Momentum enters a long trade only when four independent signals agree that a move is real and accelerating - trend direction (EMA), raw price change (ROC), strength (RSI), and momentum-of-m…
Momentum enters a long trade only when four independent signals agree that a move is real and accelerating - trend direction (EMA), raw price change (ROC), strength (RSI), and momentum-of-momentum (MACD histogram) - and exits once all four flip together.
How it trades
| Ingredient | Meaning |
|---|---|
| EMA(fast) vs EMA(slow) | Trend direction - fast average above slow means the trend is up |
| ROC | Rate of Change - raw percentage price move over the lookback period, vs. a threshold |
| RSI | Trend strength - is the move backed by real buying/selling pressure, or just drifting |
| MACD | Momentum histogram (MACD line - signal line) - is the move accelerating or fading |
Buy (all four must agree):
ema_fast > ema_slow AND roc > threshold AND rsi > 55 AND macd > 0
Sell (all four must agree, only when already in a position):
ema_fast < ema_slow AND roc < threshold AND rsi < 45 AND macd < 0
ROC(14) > 2 for "at least 2% momentum") is a reasonable production tweak.
When it works best
Works best when a move is genuinely accelerating - the early-to-middle stage of a strong trend, where trend, raw price change, strength, and momentum are all still building together. Requiring all four to agree means this strategy sits out more often than SMA Crossover or RSI Mean-Reversion (fewer, more selective trades) and tends to miss the very start of a move (all four take a few bars to align) in exchange for filtering out weak or fading trends that a single-indicator trend filter would still have entered.
Backtest this strategy yourself
Build these rules on the Free plan, adjust them, and see how they would have traded.