Momentum BF

The Momentum BF indicator identifies and tracks price momentum trends to provide actionable long and short signals based on relative price changes over a specific lookback period.

Usage

The tool highlights market momentum by comparing current price action to historical data. A long signal is generated when the current price is higher than it was X bars ago and higher than the previous candle, indicated by a green background. Conversely, a short signal is triggered when the price is lower than both the previous candle and the lookback reference, marked by a red background.

The script also includes dynamic stop-loss levels displayed on the chart:

• Yellow/Orange Lines: Represent the stop-loss levels for active positions.
• Background Colors: Green indicates a long entry bias, while red indicates a short entry bias.

Users can toggle between "Fixed" percentage-based stops or "ATR Derived" volatility-based stops to suit different market conditions.

Details

The momentum calculation is derived from a dual-comparison logic. First, it measures the difference between the current price and the price at a user-defined "Momentum Length." Second, it confirms the direction by ensuring the most recent candle change aligns with that broader trend. This helps filter out minor fluctuations that do not represent a sustained shift in momentum.

Settings

Momentum

• Momentum Length: Sets the number of bars back used to calculate the primary momentum trend.

Stop Loss L/S

• Stop Loss Type: Choose between "Fixed" (percentage) or "ATR Derived" (volatility-based) stop losses.
• Fixed Stop Loss %: Sets the percentage distance for the fixed stop loss.
• ATR Stop Period: The lookback period for the Average True Range calculation.
• ATR Stop Multiplier: The multiplier applied to the ATR value to determine the stop distance.

Longs or Shorts

• Use Longs/Use Shorts: Enables or disables the execution of long or short signals independently.

FAQ

How do I access Momentum BF?

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 intraday trading?

Yes, while the original logic was tested on daily timeframes, the settings for momentum length and ATR multipliers can be adjusted for lower timeframes.

What is the difference between the stop loss types?

The Fixed stop loss remains at a constant percentage from your entry, while the ATR Derived stop loss adjusts based on recent market volatility.