Adaptive Momentum Trading Strategy

The Adaptive Momentum Strategy operates on a multi-factor confirmation system to identify high-probability trade entries. It combines trend analysis using an Exponential Moving Average (EMA) with momentum detection via the Relative Strength Index (RSI). The strategy specifically looks for oversold conditions in the context of overall uptrends, or trend confirmations through price/EMA crossovers. Risk management is a core component of the strategy, using the Average True Range (ATR) to dynamically set take profit and stop loss levels based on current market volatility. This ensures that the strategy adapts to changing market conditions rather than using fixed price targets.\n\nPosition sizing is calculated based on a percentage risk model, allowing traders to maintain consistent risk exposure regardless of asset volatility or account size. This approach helps preserve capital during drawdown periods while maximizing returns during favorable market conditions. The strategy incorporates multiple exit conditions including take profit targets, stop loss levels, and RSI-based exit signals when momentum begins to wane. This comprehensive approach to trade management ensures that profits are protected while allowing winners room to run in strong trends.