Hash Momentum Strategy

The Hash Momentum Strategy tool is a momentum-based trading system designed to identify and capture high-probability directional price movements by detecting momentum acceleration.

Usage

This strategy is used to find entries during periods of increasing momentum rather than relying on lagging trend-following indicators. Users can identify potential long or short setups when the price exhibits acceleration above a dynamic threshold.

The strategy incorporates several functional layers:

• Momentum Acceleration: Triggers signals when the current momentum exceeds an ATR-based dynamic threshold and shows positive acceleration.
• Trend Filtering: An optional EMA filter ensures trades are only taken in the direction of the broader trend.
• Risk Management: The system automatically calculates exit levels based on a user-defined Risk:Reward ratio.
• Partial Profit Taking: Users can secure gains by closing portions of the position at multiple stages (TP1, TP2, and Final TP).
• Time/Session Filters: Trading can be restricted to specific high-liquidity sessions (Tokyo, London, New York) or disabled during weekends.
• Trade Cooldown: A configurable bar-based cooldown prevents overtrading immediately after a trade is closed.

Details

The Hash Momentum Strategy differentiates itself from standard moving average crossover systems by focusing on the rate of change in price. It calculates momentum as the difference between the current price and the price $n$ bars ago. By normalizing this value and comparing it to a volatility-adjusted threshold (ATR), the script identifies entries when the market is gaining strength.

Implementation details include:

• Normalization: Momentum is normalized against its standard deviation to provide a "sigma" value for strength measurement.
• Volatility Adaptation: The momentum threshold is dynamic, widening in high-volatility markets and tightening in quiet ones to maintain signal quality.
• Trade Execution: Orders are processed on bar close to ensure signal stability.

Settings

Core Strategy

• Momentum Length: The number of bars used for the momentum calculation.
• Momentum Threshold: An ATR multiplier that defines how strong the momentum must be to trigger a signal.
• Use EMA Trend Filter: Toggles the requirement for price to be on the correct side of the EMA for trade entries.
• EMA Length: The period used for the trend-confirming EMA.

Filters

• Use Trading Session Filter: Enables or disables session-based trading restrictions.
• Tokyo/London/New York Sessions: Individual toggles to allow trading during specific global market hours.
• Weekend Off: Prevents the strategy from opening new positions during Saturdays and Sundays.

Risk Management

• Stop Loss %: Sets a fixed percentage-based stop loss from the entry price.
• Risk:Reward Ratio: Determines the final take profit target as a multiple of the initial risk.
• Use Partial Profit Taking: Enables closing the position in stages.
• First/Second TP R:R: Defines the reward-to-risk levels for the first and second partial profit targets.
• First/Second TP Size %: Specifies what percentage of the position to close at each target.

Trade Management

• Use Trade Cooldown: Enables a mandatory waiting period between trades.
• Cooldown Bars: The number of bars to wait after a trade closes before allowing a new entry.

FAQ

How do I access the Hash Momentum Strategy?

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

Can I use this for scalping or swing trading?

Yes, the strategy is highly adjustable. Lowering the momentum length and threshold makes it more suitable for lower timeframe scalping, while increasing these values optimizes it for higher timeframe swing trading.

Why are some signals filtered out?

Signals may be filtered if the price is on the wrong side of the EMA (if enabled), if the market is in a cooldown period, or if the current time falls outside of the allowed trading sessions.