Trend Momentum - Tradingriot

Riot Momentum blends three robust and momentum components into one normalized oscillator built for daily trend identification:

Inspired by Advanced Futures Trading Strategies book by Robert Carver


1. EWMAC Trend (8/32, 16/64, 32/128)
Three exponential moving-average crossover pairs, normalized by realized volatility. This captures fast, medium, and slow trend behavior. Signals are smoothed through ensemble averaging.

2. Breakout Trend (20, 40, 80-day)
Classic Donchian-style breakout logic. The script measures where price sits inside its rolling range, scales it to a forecast value, and smooths it based on Carver’s recommended span. This captures structural market shifts that EMAs miss.

3. Acceleration / ROC Shift
Short-term rate-of-change of momentum, normalized by volatility. This highlights inflection points and early trend transitions.

The three systems are combined with fixed weights and clipped to a ±20 forecast cap. The final value is rescaled to a ±100 histogram for intuitive reading.

Z-Score Regime Framework

The combined momentum is wrapped in a statistical regime filter using a rolling Z-score:

Normal: |Z| < 1.5

Elevated: 1.5 ≤ |Z| < 2.0

Peak: |Z| ≥ 2.0

The histogram automatically adapts its color based on:

Signal direction (long vs short)

Z-score regime (normal, elevated, peak)

This gives immediate context: not only what the trend is, but how statistically stretched it is relative to the past year.

Optional Z-score bands and mean line help visualize regime behavior over time.

Candle Coloring

Bars can optionally take on the histogram’s regime-aware coloring, making full-chart trend state obvious at a glance.

Alerts

Built-in alerts:

Momentum turning long

Momentum turning short

Z-score reaching peak extremes

Z-score reverting back toward normal

How to Use

This is a multi-factor trend filter, not a trade-entry generator. It excels at:

Trend following

Regime classification

Identifying exhaustion/extremes

Filtering whipsaw environments

Portfolio rotation and timing models

Use the histogram direction for high-level trend bias. Use the Z-score color transitions to gauge stretch and mean-reversion risk.