7/28/2019 Momentum Oscillators
1/32
7/28/2019 Momentum Oscillators
2/32
Momentum Oscillators:
Objective, Selective, Effective
The MOOSE is Loosewww.cedarcreektrading.com
http://www.cedarcreektrading.com/http://www.cedarcreektrading.com/7/28/2019 Momentum Oscillators
3/32
Momentum Oscillators
I believe the most useful tools employed by techniciansare momentum oscillators. The momentum oscillator
measures the velocity of directional pricemovement. When price moves up, at some point the
market is considered to be overbought; when it movesdown, at some point the market is considered to be
oversold. In either case, a reaction or reversal isimminent.
7/28/2019 Momentum Oscillators
4/32
Moving Average Oscillator
Bollinger Band Oscillator
StochasticRSI Oscillator Fibonacci Chande Momentum Oscillator
Standard Error Oscillator
MACD Oscillator
Momentum Oscillators
7/28/2019 Momentum Oscillators
5/32
7/28/2019 Momentum Oscillators
6/32
The slope of the momentum oscillator is directlyproportional to the velocity of the move. Thedistance traveled up or down by the momentum
oscillator is proportional to the magnitude of themove. The momentum oscillator is usuallycharacterized by a line on a chart drawn in two
dimensions. The Y axis (vertical) representsmagnitude or distance the indicator moves; theX axis (horizontal) represents time.
Momentum Oscillators
7/28/2019 Momentum Oscillators
7/32
The momentum oscillator drawn in this manneris characterized by the fact that it moves veryrapidly at market turning points and tends to
slow down as the market continues thedirectional move.
Momentum Oscillators
7/28/2019 Momentum Oscillators
8/32
CCT Moving Average Oscillator
The first formula I ever programmed wasmoving average oscillator (with my TandyModel I1979). Ive built many oscillators
based on moving averages. This MAO is a 3-day simple moving average of the differencebetween a 3 and 13 day sma.
Mov(Mov(C,3,S)-Mov(C,13,S),3,S)
7/28/2019 Momentum Oscillators
9/32
7/28/2019 Momentum Oscillators
10/32
7/28/2019 Momentum Oscillators
11/32
Bollinger Band Oscillator
Bollinger Bands were developed by John Bollinger andare envelopes that are plotted at two (2) standarddeviation levels above and below a movingaverage. Long ago, Uncle Steve reconfigured the classicbands and invented the Bollinger Band Oscillator.
The new indicator constructs two (2) parallel linesinstead of the erratic envelopes. These parallel linesrepresent a measurement of two (2) standard deviationsfrom the mean and are assigned zero and 100 on thechart. The indicator represents the price as it travels
above and below the mean (50%) and outside the twostandard deviations (zero and 100). Penetration of theupper or lower band represents overbought andoversold conditions.
((C+2*Std(C,21)-Mov(C,21,S))/(4*(Std(C,21)))*100)
7/28/2019 Momentum Oscillators
12/32
7/28/2019 Momentum Oscillators
13/32
7/28/2019 Momentum Oscillators
14/32
StochasticRSI Oscillator
Roger Altman, William Blau, Stanley Kroll, andTushar Chande have all improved on J. WellesWilders Relative Strength Index. I believe thebest of these derivative indicators is the
Stochastic RSI. MetaStock offers one version ofthis indicator on their formula page. Thisversion is just one of many I use. I like
substituting the numbers 3, 5, & 8 in thisformula.
Mov( ( RSI(8) - LLV( RSI(8) ,8 ) ) / ( ( HHV(
RSI(8) ,8) ) - LLV(RSI(8),8) ),3,E) *100
7/28/2019 Momentum Oscillators
15/32
7/28/2019 Momentum Oscillators
16/32
7/28/2019 Momentum Oscillators
17/32
Fibonacci Chande Momentum
Oscillator
The Fibonacci Chande Momentum Oscillator(FibCMO) is a modification of the ChandeMomentum Oscillator (CMO).
The FibCMO is a great timing device for entry,especially if timing into swing tradeswith thetrend.
This indicator is an example how a trader cantake a formula and improve its performance bythinking outside the box.
((CMO(C,3))+(CMO(C,5))+(CMO(C,8)))/3
7/28/2019 Momentum Oscillators
18/32
7/28/2019 Momentum Oscillators
19/32
7/28/2019 Momentum Oscillators
20/32
Standard Error Oscillator
During the past year, I have become fascinatedwith Standard Error Bands. Heres a formula
that I use to determine overbought and oversold
situations in the index futures markets.
(C+2*STE(C,8)Mov(C,3,S))/(4*(STE(C,8)))*100
7/28/2019 Momentum Oscillators
21/32
7/28/2019 Momentum Oscillators
22/32
7/28/2019 Momentum Oscillators
23/32
MACD Oscillator
Most technical analysts (including Equis International)believe the MACD indicator is "the difference between12-day and 26-day exponential moving averages." Ivenever been one to run with the crowd (even though I
was part of the Merrill Lynch herd). Uncle StevesMACD Oscillator substitutes fibonacci numbers,creating an indicator that is smoother than a lot ofpublished versions.
(Mov(C,13,E) - Mov(C,21,E))-(Mov((Mov(C,13,E) -Mov(C,21,E)),5,E))
7/28/2019 Momentum Oscillators
24/32
7/28/2019 Momentum Oscillators
25/32
7/28/2019 Momentum Oscillators
26/32
7/28/2019 Momentum Oscillators
27/32
LinReg Oscillator
This momentum oscillator is an extension of mylate 70s work (see CCT Moving Average
Oscillator). It simply plots a comparison of two
linear regressions. Both the length of theregression and the amount of lag time are
pegged to a fibonacci number.
(LinearReg(C,13)/Ref(LinearReg(C,13),-13))-1
7/28/2019 Momentum Oscillators
28/32
7/28/2019 Momentum Oscillators
29/32
7/28/2019 Momentum Oscillators
30/32
7/28/2019 Momentum Oscillators
31/32
C d C k T d CTA
7/28/2019 Momentum Oscillators
32/32
Cedar Creek Trading, CTA
Steve Karnish, Principal
1-877-668-1125
Uncle Steve hard at work..
Top Related