Momentum Strategy

9시간 전

Momentum Strategy
This script implements a simple yet effective momentum-based strategy designed to capture strong market trends. It leverages a dual-layer momentum calculation to identify entry points for both long and short trades, providing clear stop-loss levels to manage risk.

How It Works:
Momentum Calculation:
The script calculates momentum over a customizable period (default: 12) by comparing the price difference between the current close and the close n bars ago.
A second momentum is calculated on the first momentum to confirm the trend's strength.

Trade Entries:

Long Entry: When both the first and second momentum are positive, the strategy triggers a long entry, placing a stop order just above the current high.
Short Entry: When both momentum layers are negative, the strategy triggers a short entry, placing a stop order just below the current low.
Risk Management:
All entries are placed using stop orders to avoid premature fills in choppy markets. Additionally, the strategy dynamically cancels pending entries when conditions are no longer favorable, helping to prevent unnecessary trades.

Key Features:
Customizable Length: Users can adjust the lookback period for the momentum calculation to fit their trading style.
Automatic Stop Placement: Stops are placed at the local high/low to secure positions.
Simple and Effective: Combines a dual momentum filter with basic stop management for trend-following setups.
Ideal for traders looking for an automated strategy to follow momentum in trending markets.