- This momentum and trend-following strategy captures the majority of any trending move, and works well on high timeframes.
- It uses an equal-period and crossover to detect trend acceleration/deceleration, since an 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 and of the same length, e.g. EMA-50 and SMA-50.
- The overall trend bias is determined using a slower 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.
- 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.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.