This example illustrates how momentum and trend strength can be combined to
form a basic discretionary system. A linear regression slope measures short
term momentum while the Average Directional Index gauges the persistence of a
move. Two independent rules trigger entries: a momentum pivot accompanied by a
drop in ADX, or a new ADX high with momentum turning up from negative values.
The strategy is intentionally simple and focuses on long positions. It is meant
as a template for testing ideas such as ATR‑based risk levels and optional exit
controls. Developers can expand the exit logic or add stop‑loss handling to
turn it into a full trading model.
- Entry Criteria:
- Momentum pivot high and ADX declining.
- ADX pivot high with momentum rising from below zero.
- Long/Short: Long only by default.
- Exit Criteria:
- Momentum pivot high (if momentum exit is enabled).
- Custom strategy exit placeholder.
- Stops: None; ATR values are available for external use.
- Default Values:
- Momentum length = 20, DI length = 14.
- ADX key level = 25, ATR length = 14.
- Filters:
- Category: Momentum
- Direction: Long
- Indicators: Linear Regression, ADX, ATR
- Stops: No
- Complexity: Low
- Timeframe: Short/medium
- Seasonality: No
- Neural networks: No
- Divergence: Yes (momentum pivots)
- Risk level: Medium