Chande momentum oscillator indicator

Description of Chande momentum oscillator indicator, drawing a graph on candles

Today's article is all about the Chande momentum oscillator indicator.

This is the fourth article about the technical indicators. If this is a new topic for you, some concepts and definitions are disclosed in the first article of the series - Simple Moving Average.

Other articles -
Weighted moving average

Exponential Moving Average

As you can see, I've started with a description of all kinds of moving averages. And here we have a momentum indicator. But that's not because we run out of moving averages, but because our next moving average indicator is a variable moving average. It's based on the Chande momentum oscillator indicator, so I have to start from it.

It was invented by Tushar Chande.

Here is its idea - the price movement is calculated for a given number of periods n. The difference is taken for two adjacent candles, e.g., the close price of the last and next-to-last candles. If the difference is positive - the price goes up, it is added on to the total positive difference; if the difference is negative - the price goes down, it is added on to the total negative difference.
The value of the indicator is calculated as a fraction. The difference of the resulting positive and negative differences in the numerator and their sum multiplied by 100% is the denominator.

It's probably maybe written like this

CMO_n={100\%}\frac{\sum_{i=2}^n{\text{positive movement}} - \sum_{i=2}^n{\text{negative movement}}}{\sum_{i=2}^n{\text{positive movement}} + \sum_{i=2}^n{\text{negative movement}}},

\text{positive movement}=\begin{cases} close_i-close_{i-1},& close_i>close_{i-1} \\ 0,& close_i<close_{i-1} \end{cases}
\text{negative movement}=\begin{cases} close_{i-1}-close_i,& close_i<close_{i-1} \\ 0,& close_i>close_{i-1} \end{cases}

This indicator has a range from -100 to +100. The security is deemed to be overbought when the momentum oscillator is above +50 and oversold below -50.

It's laid off on a separate scale, so the two following graphs are candles and, in fact, an indicator.

There is, however, a little problem with the fact that they have separate navigation. That's why you have to switch to the last values two times - first switch candles, then indicator, but such is our current level of technological development.

PLANETCALC, Chande momentum oscillator

Chande momentum oscillator

Digits after the decimal point: 2
Moving average
The file is very large. Browser slowdown may occur during loading and creation.
Moving average
The file is very large. Browser slowdown may occur during loading and creation.

Candles for USDJPY

Items per page:

URL copied to clipboard
PLANETCALC, Chande momentum oscillator indicator