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Triple Momentum Trading Model
As a simple timing model, the triple momentum trading model is built on ROC, a momentum-based indicator. It uses three ROC indicators in different periods to identify market uptrends and downtrends.
The model assumes that the ROC indicator with the shortest period initially drives the other two indicators to change. There is then a greater probability for the price to continue to move in the same direction of the indicators.
The call for entry and exit in a trade using the triple momentum trading model is very simple. When three ROC indicators reach three specific values and the sum of the three indicator readings reaches another fixed value, the entry point will then occur when the short-term ROC curve breaks above the long-term one. But If the three indicators are lower than the three fixed values and the sum of the indicator readings is lower than a certain value, the exit point will then occur when the short-term curve crosses below the long-term one.
The model assumes that the ROC indicator with the shortest period initially drives the other two indicators to change. There is then a greater probability for the price to continue to move in the same direction of the indicators.
The call for entry and exit in a trade using the triple momentum trading model is very simple. When three ROC indicators reach three specific values and the sum of the three indicator readings reaches another fixed value, the entry point will then occur when the short-term ROC curve breaks above the long-term one. But If the three indicators are lower than the three fixed values and the sum of the indicator readings is lower than a certain value, the exit point will then occur when the short-term curve crosses below the long-term one.
