Strategies / Momentum / PMO Color State Signals

PMO Color State Signals

The system buys when a momentum histogram first turns rising above zero, and sells short when it first turns falling below zero. Longs close when it stops rising above zero, and shorts close when it stops falling below zero.

MomentumLong & shortSwingGold4 hours

n/aProfit factor

1,821Net profit EUR

34.01%Win rate

4,455Trades

-1,572Max drawdown

0.41Avg trade

Best run of 4. Gold, 4 hours, spread 0.6, from run sweeps:2026-10-12-GOLD-4h-opt.tsv:22.

Entry rules, long

The histogram, double-smoothed price momentum minus its 10-period EMA, is above zero and rising compared with the prior bar.

Entry rules, short

The histogram is below zero and falling compared with the prior bar.

Exit rules

A short closes on the first bar the histogram is below zero but no longer falling.

Test conditions

Period	Up to 2026-10-12
Instrument	Gold, 4 hours
Spread	0.6 points
Starting capital	1,000,000
Costs	Spread only. Commissions and overnight financing are not included.
Bars	Up to 200,000 bars, fewer where the instrument has less history
Last tested	2026-10-12

Every run

Markets and timeframes tested

Market	Timeframe	PF	Trades	Win %	Net	Max DD
GoldBest run	4 hours	n/a	4,455	34.01	1,821 EUR	-1,572
USD/JPY	Daily	n/a	2,072	37.84	1,385,790 USD	-426,800
GBP/USD	Daily	n/a	2,070	38.02	14,851 USD	-4,376
DAX 40	4 hours	n/a	4,306	36.67	7,773 EUR	-3,546

Charts

Results by run

Net profitMax drawdown

The code

ProBuilder code, as tested

// ==============================================================
// PMO Color State Signals
// ProRealAlgos Strategy Library  |  prorealalgos.com
// Type: Momentum
// Direction: Long & short
// Timeframe tested: 4 hours
// ==============================================================

DEFPARAM CumulateOrders = false

ONCE csfa = 0
ONCE csfb = 0
ONCE hc = 0

chg = 100

45 more lines: the entry and exit rules.

Setup

How to load it

Copy the code with the copy button on the code block.
In ProRealTime, open a chart of the instrument and timeframe you want to test, then open ProOrder > New trading system and choose "Create with programming".
Paste the code, give the system a name and save it.
Click "Backtest", set your own spread and position size, and run it before you consider trading it live.

Indicators used

EMA

Read this firstKnown weaknesses3 points

No profit factor is available, because only sweep results exist for this strategy.
The maximum drawdown of 1,572 EUR is large next to the net profit of 1,821 EUR.
The code sets no stop loss, so a losing trade stays open until an exit signal arrives.

Questions

About this strategy

Can I run PMO Color State Signals in ProOrder?

Yes. The code is ProBuilder and runs as an automated ProOrder system. Backtest it on your own account with your own spread and position size before trading it live.

Which markets was it tested on?

It was tested on 4 market and timeframe combinations. The best run by trade count was Gold, 4 hours, with 4,455 trades.

How large was the drawdown?

The best run had a maximum drawdown of 1,572 EUR at the tested position size, against a net result of 1,821 EUR.

Does it trade long, short or both?

It trades both long and short.

Reversal Pattern With Chaikin Volatility

Uses the same indicator.

2.26 PF · 6,872 trades

CCI Breakout

Best run on the same market, Gold.

1.08 PF · 6,065 trades

ATR Momentum

Also a momentum strategy.

n/a PF · 15,021 trades

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Past backtest results do not guarantee future results. This is not financial advice. Curated and maintained by ProRealAlgos. ProRealTime™ is a trademark of ProRealTime SAS. prorealalgos.com Stats Docs