Adaptive Momentum Classifier

The Adaptive Momentum Classifier indicator evaluates four independent market dimensions—momentum, trend, volatility position, and money flow—to generate high-probability trading signals based on multi-axis consensus. By normalizing these dimensions through percentile ranking, it creates a unified composite score (0–100%) that filters out market noise and ensures signals only fire when various aspects of price action align.

Usage

The Usage section describes how the script can be used to identify trend direction and potential entry points. The tool provides visual cues through a dynamic trend band and signal labels:

• Trend Band: The EMA-based band is colored based on the composite score. Green indicates bullish momentum (>55%), Red indicates bearish momentum (<45%), and Yellow represents a neutral transition zone.
• Signal Labels: Buy (▲) and Sell (▼) labels appear when the composite score crosses the defined threshold while passing all agreement gates and filters.
• Consensus Check: Use the dashboard to see how many axes (e.g., 3/4) agree with the current direction. Higher agreement ratios indicate stronger setups.
• Presets: Users can toggle between Conservative (fewer, high-conviction signals), Aggressive (faster entries), and Scalping (optimized for 1-5M timeframes) to match their trading style.

Details

The script utilizes an orthogonal axis design to ensure that the measurements are truly independent:

• Momentum Axis: Blends RSI and Rate of Change (ROC) to capture both speed and sustained momentum.
• Trend Axis: Combines MACD histograms with ATR-normalized EMA slope for directional conviction.
• Volatility Axis: Uses Bollinger %B and ATR expansion ratios to determine if price is breaking out or overextended.
• Flow Axis: Integrates Money Flow Index (MFI) and OBV slope to track accumulation/distribution (automatically disables on assets without volume).

The core engine uses Percentile Normalization, ranking current values against the last N bars (default 89) to create a uniform 0–1 scale. This allows the script to mathematically average different indicators that would otherwise be incomparable.

Settings

Main Settings

• Sensitivity Preset: Chooses between Conservative, Default, Aggressive, and Scalping modes.
• Scoring Lookback: The historical window for percentile ranking. Higher values create more stable scores.
• Signal Threshold: The minimum composite score required to trigger a signal.

Feature Engine

• RSI/ROC Length: Parameters for the Momentum axis.
• MACD Fast/Slow/Signal: Parameters for the Trend axis.
• Bollinger Length: Parameter for the Volatility axis.
• MFI/OBV Smooth: Parameters for the Flow axis.

Filters

• Trend Alignment Filter: Restricts longs to being above the EMA and shorts below the EMA.
• Volatility Regime Filter: Suppresses signals during exceptionally low volatility or extreme market crashes.
• Volume Confirmation: Requires volume to exceed its recent average.
• Min Score Acceleration: Ensures the score is moving decisively, filtering out slow "drifting" crossovers.
• Higher TF Bias: Optional filter to align signals with a higher timeframe trend.

FAQ

How do I interpret the signal strength? Signals are classified as Strong (score ≥ 85%), Medium (≥ 75%), or Weak (< 75%) based on the composite consensus at the moment of the cross.

Why did a signal not fire when the band changed color? The band changes color at a lower threshold (55%) to show bias, whereas signals require a higher threshold (default 61.8%) plus independent axis agreement and active filters.

How can I access the Adaptive Momentum Classifier? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.