Decay Indicator Explained

The Decay indicator holds the highest recent value and lets it fade at a fixed rate — linearly or exponentially — instead of dropping instantly. It gives events memory: a spike doesn't vanish next bar, it decays, letting your logic respond to 'how recently' something happened.

How It Works

• Each bar takes the max of the new value and the decayed previous value.
• The decay rate (via length) sets how long an impulse remains influential.
• Output ramps down smoothly toward zero after each spike.

How to Trade It

Classic uses: cooldown gates ('no re-entry while the decayed signal is still above X'), aging breakout strength so follow-ups need fresh confirmation, and building 'recent event' flags for composite conditions in the Indicators Lab.

Building It in Setup.Cash

Add Decay in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. Pairs naturally with event emitters like Fractals whose signals are single-bar. For the full category overview, see the advanced momentum library guide.

Momentum signals are timing tools — combine them with a trend or regime filter and backtest the exact rules before going live.