Last Update: May 5, 2024
Trend Momentum Algo
The Trend Momentum Algo accurately identifies trend momentum changes and provides unmatched signal quality.
Benefits
- NEW: Mohren Momentum Congestion (MMC) Dots:
- Red and green DOTS signify pivots and inflection points based on momentum data. These are either new highs or lows at the point of reversal, when momentum had already turned, or inflection points (resistance levels during an up- or downtrend. There are two sizes of dots, smaller and larger ones. The larger dots signify more significant levels than the smaller dots and are presumably stronger signals. Nonetheless, the smaller dots are significant, and it also depends on the timeframe and the indicator settings that define the size of the congestion ‘area.’
- Concentration of values often occurs in the center section. This is the area where price has to overcome resistance levels and moving averages after a price reversal, as well as at reversals.
- Correctly identifies changes in trend strength and points of reversal
- Provides early warning signs of an expiring trend
- Works for all timeframes and investment types
- Settings for simplified and detailed view
- By itself it can be used as a profit-taking indicator
Signals
- Reversal of the indicator curve
- Change of color:
- blue = upward momentum
- red = downward momentum
- Works best in combination with our other indicators
- In the detailed view (all plotting options unselected), when the outer momentum trendline crosses over the orange line and before crossing the green line.
Considerations
- TRADING
The simplest way to trade this indicator is to buy when it turns blue and sell when it turns red. Or you can see more details. - DETAILED VIEW
For a more detailed view you need to unselect both FILLS in the settings in the inputs tab. On the style tab you can select which indicator lines you want to see. Besides the main trend, the indicator comes with various moving averages and their respective linear regressions. We prefer the settings you can see to the right. - DOTS
The dots mark areas where the trend is very close to one (small dot) or two (bigger dot) indicator lines. Due to the nature of the markets to have a zig-zag pattern at reversals, it often occurs that there are areas where the trend, moving averages and linear regression lines collect in a very small area, which many times happens to be the exact point of reversal.
The number of dots will change depending on the instrument and time frame. You can adjust the amount of dots by adjusting the dot values in the settings to increase or reduce the sensitivity. - CAUTION
When the trend momentum algo indicator is far away from the center line (typically after big price moves), indicator reversal and/or color change should not by itself be used as an entry signal for a long or short position. In these cases it is prone to being too early and price can still move in the same direction for quite a while before turning, even if at a lower momentum / rate of increase.
