Strategy Logic

This strategy combines range, momentum and trend-following indicators to capture short-term trends. The rules are:

1. Calculate the price range over a period (high minus low) and smooth it to get a smooth range indicator. This measures trend strength.

2. Compute a momentum indicator like the Hull curve over a timeframe. The Hull curve is effective in gauging short-term trend direction and strength.

3. When the smoothed range indicator changes color (e.g. red to green), it signals expanding range, and a long entry is taken if the Hull curve aligns (e.g. pointing up).

4. When the smoothed range flips color (e.g. green to red), it signals contracting range, and a short entry if taken if the Hull curve aligns (e.g. pointing down).

5. Add a trend-following stop loss mechanism like exiting longs if the Hull curve turns down.

Expanding ranges with directional momentum allows fast capturing of short-term trends. Trend-following stops control risk.

Advantages

• Combines multiple indicators for robust signals
• Range measures expansion, momentum gives direction
• Quickly capitalizes on short-term opportunities

Risks

• Prone to getting trapped, need timely stops
• Higher trade frequency means more costs
• Less effective in long sideways ranges

Summary

This strategy uses multiple technical indicators to quickly capitalize on short-term trends. Compared to long-term strategies, it trades more frequently to capture price swings. Strict stops are required to control risks.