Technical Momentum Strategies
17 strategies available
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Buy & Hold
Simple
Simple passive strategy: buy and hold until the end of the backtest period.
The Buy & Hold strategy is the simplest possible investment approach. On the first trading day, you invest your entire capital in the selected asset and hold it through the entire backtest period. There is no active trading, rebalancing, or …
Best for: Long-term investors who believe in the fundamental value of the asset. Perfect as a benchmark to compare active strategies. Best for tax-efficient investing with minimal …
Techniques Used
Passive investing
Long-term holding
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Mean Reversion
Moderate
Buy when price deviates below average, sell when above - betting prices return to mean.
Mean Reversion strategies assume that prices fluctuate around a central value and tend to return to that average over time. When prices deviate significantly below the moving average (typically 2 standard deviations), we buy expecting a bounce back. When prices …
Best for: Range-bound or choppy markets. Works well for highly liquid, mean-reverting assets. Not suitable for assets in strong trends or high-growth stocks.
Techniques Used
Mean reversion
Standard deviation bands
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Dual EMA Crossover
Simple
Similar to SMA crossover but uses EMAs which respond faster to recent price changes.
The Dual EMA Crossover is similar to SMA Crossover but uses Exponential Moving Averages. EMAs give more weight to recent prices, making them more responsive to price changes than SMAs. When the fast EMA crosses above the slow EMA, it's …
Best for: Traders who want faster signals than SMA crossover. Works well in trending markets where you want to catch moves early.
Techniques Used
Exponential moving averages
Crossover signals
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Volatility Breakout
Moderate
Enter when price breaks out of recent volatility range, expecting momentum continuation.
Volatility Breakout strategies identify when price moves beyond its normal range, signaling potential trend initiation. Using ATR (Average True Range) to measure typical volatility, we enter when price breaks out by a multiple of this range. The assumption is that …
Best for: Markets transitioning from consolidation to trending. Works well for momentum traders who can manage false breakouts.
Techniques Used
Volatility analysis
Breakout trading
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Trend Following
Moderate
Follow the trend using ADX to confirm trend strength before entering positions.
This strategy uses ADX (Average Directional Index) to measure trend strength and only takes positions when a strong trend is confirmed. The EMA determines trend direction: above EMA with high ADX = long, below EMA with high ADX = short. …
Best for: Patient trend followers who prioritize quality over quantity. Works well in assets with extended trending periods.
Techniques Used
ADX indicator
Trend confirmation
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Channel Breakout (Donchian)
Simple
Trade breakouts from N-day high/low channels (Turtle Trading inspired).
The Donchian Channel Breakout (famous from Turtle Trading) buys when price exceeds the highest high of the past N days and sells when price falls below the lowest low. A shorter period channel is used for exits to lock in …
Best for: Trend followers seeking a mechanical, rule-based system. Famous for working in commodities and currencies.
Techniques Used
Donchian channels
Breakout trading
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Williams %R
Simple
Momentum oscillator similar to Stochastic - trades overbought/oversold conditions.
Williams %R measures where the current close is relative to the high-low range over N periods. It ranges from -100 to 0, with readings near 0 indicating overbought (close near highs) and near -100 indicating oversold (close near lows). We …
Best for: Mean reversion traders in range-bound markets. Best combined with trend filters.
Techniques Used
Williams %R indicator
Momentum oscillator
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CCI (Commodity Channel Index)
Simple
Identifies cyclical turns and extreme price conditions using typical price deviation.
CCI measures the current price level relative to an average price level over time. High positive values indicate the price is well above average (overbought), while low negative values indicate well below average (oversold). The indicator was designed to identify …
Best for: Identifying turning points in cyclical assets. Can be used for both trend-following (+/-100 breakouts) or mean reversion (extreme readings).
Techniques Used
CCI indicator
Cycle analysis
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SMA Crossover
Simple
Buy when fast SMA crosses above slow SMA, sell on cross below.
The Simple Moving Average (SMA) Crossover strategy uses two moving averages of different periods to identify trend changes. The 'fast' SMA (typically 50 days) responds quickly to price changes, while the 'slow' SMA (typically 200 days) represents the longer-term trend. …
Best for: Long-term trend following in strongly trending markets. Best suited for patient investors who can tolerate drawdowns and want to capture major market moves.
Techniques Used
Moving averages
Crossover signals
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RSI Mean Reversion
Simple
Buy when RSI oversold, sell when overbought.
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and magnitude of recent price changes on a scale of 0 to 100. It compares the average gains to average losses over a lookback period (typically 14 …
Best for: Range-bound or mean-reverting markets. Works best for stocks that oscillate within a trading range rather than trending strongly in one direction.
Techniques Used
RSI indicator
Mean reversion
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MACD Signal
Simple
Buy when MACD crosses above signal, sell on cross below.
The Moving Average Convergence Divergence (MACD) indicator consists of three components: the MACD line (12-day EMA minus 26-day EMA), the signal line (9-day EMA of MACD), and the histogram (difference between MACD and signal). When the MACD line crosses above …
Best for: Trending markets with clear directional moves. Particularly effective for identifying the start of new trends and momentum shifts in medium-term trading.
Techniques Used
MACD indicator
Signal line crossover
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Bollinger Bands
Simple
Buy at lower band, sell at upper band with mean reversion.
Bollinger Bands consist of three lines: a middle band (20-day SMA) and upper/lower bands set at 2 standard deviations above and below. The bands expand when volatility increases and contract when volatility decreases. When price touches the lower band, it …
Best for: Range-bound markets with regular oscillations. Works best when price respects the bands as support/resistance. Avoid during strong trending periods or breakout scenarios.
Techniques Used
Bollinger Bands
Volatility bands
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Time-Series Momentum
Simple
Trades based on an asset's own price momentum over a lookback period. If past returns are positive, go long expecting continuation; if negative, stay out or go short. Based on the academic finding that past winners tend to keep winning.
Time-Series Momentum (also called Trend Following) compares an asset's current price to its price N periods ago to determine momentum direction: 1. Calculate Return: (Current Price - Price N months ago) / Price N months ago 2. Signal Generation: If …
Best for: Trend-following investors who believe past performance indicates future direction. Works well in markets with clear trends. Best combined with other strategies to avoid momentum crashes.
Techniques Used
Momentum indicator
Trend following
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Stochastic Oscillator
Simple
A momentum indicator that compares closing price to the high-low range over a period. Uses two lines (%K and %D) to generate buy signals when crossing up from oversold levels, and sell signals when crossing down from overbought levels.
The Stochastic Oscillator measures momentum by comparing closing price to the trading range: 1. %K Calculation: %K = (Close - Lowest Low) / (Highest High - Lowest Low) × 100 This shows where the close is within the recent range …
Best for: Trading range-bound markets where mean reversion is dominant. Best used in conjunction with trend analysis - trade stochastic signals only in the direction of the …
Techniques Used
Stochastic oscillator
Momentum
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ATR Breakout
Moderate
Enters positions when price breaks out of a trading range (above 20-day high or below 20-day low). Uses Average True Range (ATR) to set dynamic trailing stops that adapt to current volatility, locking in profits while allowing room for normal price swings.
This strategy combines breakout detection with volatility-adjusted risk management: 1. Breakout Detection: Monitor the highest high and lowest low over the breakout period (default 20 days) 2. Entry Signal: Enter long when price breaks above the 20-day high; enter short …
Best for: Trend followers who want to capture large moves while managing risk systematically. Works best in markets that tend to trend after breakouts. Ideal for those …
Techniques Used
ATR indicator
Breakout detection
Trailing stops
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Multi-Indicator Ensemble
Moderate
Combines signals from multiple technical indicators (RSI, MACD, Bollinger Bands, Stochastic) to reduce false signals. Only trades when a minimum number of indicators agree, providing higher-confidence entries.
This strategy requires consensus from multiple technical indicators before trading: 1. Signal Generation: Each indicator independently generates a signal: - Bullish (+1): Indicator suggests buying - Neutral (0): No clear signal - Bearish (-1): Indicator suggests selling 2. Signal Aggregation: …
Best for: Traders who want higher-confidence signals and are willing to trade less frequently. Ideal for those who've experienced too many false signals from single indicators. Works …
Techniques Used
Indicator ensemble
Walk-forward validation
Signal weighting
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Regime Switching
Advanced
Uses Hidden Markov Models (a machine learning technique) to detect market regimes (bull, bear, sideways, high volatility) and automatically switches between different trading strategies optimal for each regime. Adjusts position sizes based on volatility targets.
This advanced strategy adapts to changing market conditions: 1. Hidden Markov Model (HMM) Training: The model analyzes historical returns, volatility, and economic indicators to identify distinct market 'states' or regimes that aren't directly observable but can be inferred 2. Regime …
Best for: Sophisticated quantitative investors who understand statistical models. Ideal for portfolios that need to perform across market cycles. Best suited for systematic funds with infrastructure for …
Techniques Used
Hidden Markov Models
Regime detection
Volatility targeting