Averaging Momentum Indicators. Do They Add Anything in Trading?
Averaging Momentum From Multiple Lookback Periods to Create One Indicator — A Python Back-test.
Averaging can open up new doors in analysis, for example, the well-known Relative Strength Index is the result of averaging a type of momentum. In this article, we will present the simple Momentum Indicator and then average it through many lookback periods in order to get a clearer view on the average momentum of the asset. Later, we will back-test this averaged indicator in a trend-following system and see if it was worth it or not. This forms part of my research on finding the best indicators and while some pass and others fail, I choose to always share the results.
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