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Multiple Time Frame Momentum Strategy

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FIGURE 2.19 SPX Daily Data with an 8-Day Lookback Period

a relatively shorter lookback period will always result with the indicator making momentum reversals very close to the price-swing highs and lows. This would seem to make a short lookback period ideal. However, the more timely signals come with a cost. A shorter lookback period will usually have lots of false momentum reversals, when very short-term momentum changes cause an indicator reversal that is quickly reversed again as the trend continues. I’ve circled three areas on the indicator window when the indicator became choppy and gave momentum reversal signals that were again reversed within a bar or two. Too short a lookback period will produce too many momentum whipsaws. There must be a reasonably happy medium, and there usually is. Figure 2.20 shows the same SPX data with the same indicator but a 13-day lookback period. What do you notice about this 13-day lookback setting compared to the prior two charts? The characteristics are (1) the indicator reaches the OB or OS zone at most

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(wiley trading) robert c miner high probability trading strategies entry to exit tactics for the for  

(wiley trading) robert c miner high probability trading strategies entry to exit tactics for the for  

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