Zero Lag Trend Signals with Momentum Ghost Machine

Submit by Maximo Trader 2024

This strategy leverages the Zero Lag Trend Signals for trend determination and multi-timeframe confirmation, combined with the  Momentum Ghost Machine for momentum filtering. Below is a detailed breakdown of the strategy components and how they work together.

Zero Lag Trend Signals (from Algo Alpha):

This indicator generates two signals, the main one trend following of direct trend, the second one always of trend but on pullback.

Momentum Ghost Machine by ChartPrime:

• Purpose: Detects momentum shifts, divergences, and convergence between price and moving averages.

• Key Features:

  • Momentum histogram highlights strength and direction.

  • Convergence-Divergence metric indicates potential reversals or trend continuations.

  • Visual projection of momentum and moving averages for predictive insights.

Setup Strategy for 15 min chart

Time Frame 5 min or higher,

Currency pairs: Volatile: Nasdaq 100, Gold, GBPUSD, USDJPY, NZDUSD, AUDUSD, AUDJPY, CADJPY, BTCUSD, ETHUSD and other.

Zero Lag Trend Signal: (Band multiplier 2.0);

Momentum Ghost Machine : (default setting);

Trading Strategy

1. Signal Generation (Primary Timeframe - 15 Minutes):

   • A Buy Signal is generated when:

     • Zero Lag Trend Signal shows an buy arrow.

     • Momentum Ghost Machine histogram is positive and increasing, indicating strengthening bullish momentum.

   • A Sell Signal is generated when:

     • Zero Lag Trend Signal shows a sell arrow.

     • Momentum Ghost Machine histogram is negative and decreasing, indicating strengthening bearish momentum.

2. Multi-Timeframe Confirmation:

   • Validate the primary trend signal across multiple timeframes (e.g., 5m, 15m, 1H, 4H, 1D):

     • For a Buy, all selected timeframes should confirm a bullish trend.

     • For a Sell, all selected timeframes should confirm a bearish trend.

1. Entry Conditions:

   • Enter a Long Position when:

     • Zero Lag Trend confirms a bullish trend across all timeframes.

     • Momentum histogram is positive, with increasing convergence-divergence values.

     • Projected momentum (from Momentum Ghost Machine) remains above the projected moving average.

1. • Enter a Short Position when:

     • Zero Lag Trend confirms a bearish trend across all timeframes.

     • Momentum histogram is negative, with decreasing convergence-divergence values.

     • Projected momentum remains below the projected moving average.

2. Exit Conditions:

   • Exit Long when:

     • Zero Lag Trend flips bearish on any significant timeframe (e.g., 1H or higher).

     • Momentum histogram turns negative or shows decreasing values.

   • Exit Short when:

     • Zero Lag Trend flips bullish on any significant timeframe.

     • Momentum histogram turns positive or shows increasing values.

1. Risk Management:

   • Use ATR (from Zero Lag or an additional indicator) to set dynamic stop-loss levels:

     • Long Position: Stop-loss below the most recent support level.

     • Short Position: Stop-loss above the most recent resistance level.

   • Set take-profit levels based on a risk-reward ratio of at least 1:1.2 to 1:1.6.

   • Limit risk to 1-2% of the trading account per trade.

2. Additional Considerations:

   • Pay attention to divergence signals on the Momentum Ghost Machine for potential reversals.

   • Use the Ghost Machine’s projection lines to anticipate possible changes in trend strength or direction.

Advantages of This Strategy

• High Accuracy: Combines trend-following and momentum indicators for robust signal validation.

• Flexibility: Adaptable to various market conditions due to multi-timeframe confirmation and squeeze dynamics.

• Risk Management: ATR-based stop-loss ensures systematic risk control.

TradingView Directory Strategies