Trading Trends with Twiggs Momentum & Keltner Channels

The objective of this system is to identify stocks with a high probability of forming a strong up-trend.

• 63-Day Twiggs Momentum (TMO) above a 42-day Wilder Moving Average identifies stocks with growing momentum.
• 63-Day Keltner Channels at a multiple of 2 times 42-day ATR is used to confirm momentum and to signal exits.

Trend-Following Rules

1. Enter when Twiggs Momentum is above its MA (and above zero) and price closes above the upper Keltner Channel.
2. Exit when price closes below the lower Keltner Channel.

Filters

If you take every TMO cross above its MA, you are likely to get a lot of whipsaws. Look for an extended period (e.g. at least two months) or a trough above the MA as shown in the example below.

Example

Cedar Woods Properties (CWP) on the ASX:

1. Go long when Twiggs Momentum forms a trough above its MA (while TMO is above zero) and price closes above the upper Keltner Channel.
2. Exit when price closes below the lower Keltner Channel.
3. Go long again when Twiggs Momentum forms a trough above its MA and is above zero and price closes above the upper Keltner Channel.

Stock Screen

There is a saved screen on the stock screener. To access:

1. Open the Stock Screener (Securities >> Stock Screens on the chart menu)
2. Select the Shared tab
3. Enter "115594" as the Screen ID and select Search
4. Select Run next to the result, or View if you want to save or modify the settings.

Indicator Setup

1. Select Indicators on the chart menu.
2. Select each of the indicators in the left panel and insert the settings:
   • Twiggs Momentum, 63-day with 42-day Wilder MA.
   
   • Keltner Channels, 63-day at a multiple of 2 times 42-period ATR.
   
3. Save the settings for each indicator using the >> button.
4. Close the Indicator Panel (X).