Moving Average Momentum Signals

30 May

Best for trade execution in lower timeframe (1m,5m,15m) with momentum confirmation in higher timeframes (2h,4h,1d)


This indicator relies on three key conditions to determine buy and sell signals: the price's deviation from a short-term moving average, the change in the moving average over time (past 10 candles), and the price's deviation from a historical price (40 candles). The strategy aims to target moments where the asset's price is likely to experience a reversal or momentum shift.

Conditions

1. Price deviation from short-term Moving Average (MA): Current candle close minus the 10-period MA (price action past 10 candles)
   
2. Change in Moving Average over time: Current 10-period MA minus the 10-period MA from 10 candles ago (price action past 20 candles)
   
3. Price deviation from historical price: Current close minus the close from 40 candles ago (price action past 40 candles)
   

Signal Generation Logic

• Buy Signal: Triggered when all three conditions are positive. Confirmed if the previous signal was a sell or if there were no previous signals
  
• Sell Signal: Triggered when all three conditions are negative. Confirmed if the previous signal was a buy or if there were no previous signals
  

Usage and Strategy
After back testing, I observed the higher timeframes were a good indication of momentum/sentiment that you can take note of while trading intraday on the lower time frames (time intervals stated above). Background highlights are also displayed for easier visualization of bullish/bearish skew in terms of the volume of signals generated.