SMH_DualMomentum (ROC + Volume Trend) — Strategy by yellowpierid
By yellowpierid
Performance Metrics
- Author: yellowpierid
- Symbol: NASDAQ:SMH
- Timeframe: 1 day
- Net P&L: +135.21 USD (+0.14%)
- Win Rate: 38.5%
- Profit Factor: 1.732
- Max Drawdown: 75.13 USD (0.08%)
- Total Trades: 148
Description
SMH Dual Momentum (ROC + Volume Confirmation)This indicator identifies high-quality bullish trends by combining price momentum (Rate of Change) with volume confirmation, and exits when momentum structurally fails.Core LogicBUY signalRate of Change (ROC) over N periods is above a positive threshold (strong upside momentum)Current volume is above its moving average (rising market participation)SELL signalROC crosses below zero, indicating loss of bullish momentumWhy It WorksROC measures the speed and strength of price movement, filtering out weak or drifting trendsVolume confirmation ensures momentum is supported by real capital flow, reducing false breakoutsMomentum-based exit avoids prolonged drawdowns and capital stagnationKey AdvantagesFocuses on trend continuation, not predictionFilters out low-quality price moves and range-bound marketsCaptures long, high-conviction trends with relatively few tradesSimple, robust rules using only price and volumeBest Use CasesDesigned for trend-driven ETFs such as SMH (Semiconductors)Suitable for swing to position trading on daily chartsWorks best in markets with strong sector rotation and institutional participationNotesThis is a trend-following momentum tool, not a mean-reversion indicatorNo stop-loss is built in; risk management should be handled externally if requiredParameters can be adjusted to match different timeframes or assets