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Forex Momentum Indikatoren.

Started by admin, Apr 16, 2020, 11:42 am

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admin

Forex Momentum Indikatoren.
Momentum indicators in Forex records the speed of prices moving over certain time period.
At the same time Momentum indicators track strength and weakness of a trend as it progresses over a given period of time the highest momentum is always registered at the beginning of a trend, the lowest - at its end point.
Momentum Indicators in Forex.
Accumulative Swing Index ASI Advance Decline Ratio ADR Aroon Indicator Aroon Oscillator Chande Momentum Oscillator Commodity Channel Index CCI Intraday Momentum Index Gravity Linear Regression Slope MA Angle Mass Index Momentum Price Oscillator Random Walk Index Range Indicator Rate of Change ROC Relative Momentum Index Relative Strength Index RSI Smoothed Indexed Rate of Change SIROC Stochastic Stochastic RSI Stochastic Momentum Index Swing Index Ultimate Oscillator Williams R Williams Accumulation-Distribution.
How to trade with Momentum Indicators.
With Momentum indicators Forex traders look for controversy between chart prices and Indicator suggestions .
directional divergence between the price and momentum signals of a trend s developing weakness.
price spikes that occur during weak momentum, are the last warning signals of the trend change.
also trend change should be expected during sideways moving prices and controversially strong momentum.
Momentum indicators, such as RSI and Stochastic, are favorite indicators for non-trending markets.
Momentum indicators ideally gauge whether the market is overbought or oversold during its non-trending state, and highlight potential reversal points before those actually occur.
The two best momentum indicators are seems to be Stochastic and RSI.
I d like to learn more about RSI trading please.
How to combine those indicators.
Also why momentum trading is so popular, what s its importance exactly in.
Momentum trading in Forex or any other market is all about being able to get in and out of a trade at the right moment - at the moment where market is gaining initial strength momentum and runs first few miles with great confidence and without looking back.
When momentum is decelerating or lost, an uncertainty sets among investors as they try to re-evaluate their chances for further profitable price chasing, and the big nice rallies or sell-offs are slowing down yielding no more profit potentials till the next momentum.

admin

Momentum indicators help to catch that Here and Now time to place orders and lock in profits.
It is true that two most popular indicators in Forex remain to be Stochastic and RSI.
Although just one of them will be enough to identify periods of forming momentum in Forex market, you may combine two indicators in order to refer to either one or both of them when expectations for new trading opportunities are high.
The best explanation on combining two momentum indicators could only be possible with a help of a specific Forex trading strategy, so we ve found an example for you online from a very reputable site RSI and Stochastic strategy combined and hope you enjoy it.
Whats the exclusive use of momentum indicator,if all i need to see while investing is the trend and the trend indicator do that job very well.
Explain the cons of investing without momentum indicators.
That s quite easy to explain.
Trend indicators tell which of the trends up or down is in place.
Trend indicators also tell when the trend changes or is about to change.
But, there is one thing trend indicators cannot show - and this is the very moment at which all powers of a trend have gathered the momentum to produce a move.
In simple words, it s a situation when, for example, you know that a trend is up, but you don t know whether you should Buy it now or wait till you get a better price.
That s where momentum indicators come in handy.
Momentum indicators show the very best moment when you can Buy it having the highest odds that the market will move into your favor immediately without looking back.
Also you can rely on momentum indicators to suggest when the powers of a trend or simply the momentum is weakening.
Using this information you can take decisions on either taking quick profits and be out of the trade or review and re-adjust your trading stops.
Without momentum indicators it would be difficult to time trades specifically entries precisely, besides there is a chance to enter a trade when the market has made quite a progress and as a result used all its power lost momentum and is preparing to retrace to regain it, leaving late newcomers at the tip of a reversal.
how do you know whether a market is trending or not.
When the market keeps making higher highs and higher lows - it is trending upwards and the trend is intact.
When the market keeps making lower highs and lower lows - it is trending downwards and the trend is intact.
Any changes in this sequence invites ranging market reaction.
In addition, traders often use Moving averages.
Classic example, Alligator indicator Alligator.

admin

When there is a prefect lineup blue, red, green - there is a trend.
When lines mix up, there is no trend.
The first uptrend is marked with green circle - shows the beginning of a trend, when all 3 moving averages are lined up.
The red circle is the end of the downtrend - when the green moving average crosses over the red moving average, breaking the prefect sequence.
what is the 3 Moving average line.
how many days.
3 Moving average line consists of 3 MAs with next settings 13, 8 and 5.
See further details for Williams Alligator Indicator.
what are the best moving average periods for trading 1 min or 5 mins chart.
If you want to see trends on 1 5 min, use 20 SMA.
Also price would respect 200 EMA.
Smaller moving averages would only dance back and forth with price bars without providing any considerable use.
This is the advice I ever get for Forex so far.
LOL at above comment.
I just came accross this site today and was amazed at what I saw.
Thank you so much for your concern.
What is the best MAs combination for 15m time frame or 30mns.
Depends on your goals.
Don t be surprised if someone tells you that there is no ideal Moving average or set of averages.
Every one of them to some point hits the perfect trade one time and misses on the other.
Check out this page about Moving averages, in particular the paragraph about most common moving averages.
You can certainly use those on 15 min or 30 min time frame.
I need some enlightenment on the use of support and resistance points when trading.
Please also clarify me on how to actually place your stop loss.
For example you may place it at 10 pips away from your position in line with your money management strategy but some times the price will swing to 12 pips thereby stopping you out only for it to swing back up and make much profit.
How do you strike a balance between your money management limit and the possibility of the price crossing your limit and swinging back in the opposite direction.
Hi, Could you please send write to me indicator Stochastic Momentum Indicator Index .
I have been able to find its formula for metastock.
100 Mov Mov C - .
5 HHV H,13 LLV L,13 ,25,E ,2,E .
5 Mov Mov HHV H,13 - LLV L,13 ,25,E ,2,E .
but i need it for dot net sochastic momentum calculatio n C code or lib.
would you please telling me about which momentum indicators that has highest accuracy in time frame 5 or 15, and also the best parameter setting of it - absolutelly thanks before.

admin

All aspiring traders know the importance of momentum.
There are numerous clichés that urge traders to go with the momentum.
In the 1960s, the concept of rate of change ROC , or momentum, became popular with traders, and this popularity has lasted up to today, though it has probably been unseated to some degree by other indicators.
The Momentum indicator measures the amount and speed that a currency s price has changed over a given time span, pieces of information that we can take advantage.
Generally, strong trends reflect increasing momentum, whereas weakening trends reflect decreasing momentum.
We will be discussing the original ROC momentum indicator, and not indicators commonly referred to as momentum indicators, such as Accumulative Swing Index ASI , Advanced Decline Ratio ADR , Aroon, Commodity Channel Index CCI , Relative Strength Index RSI , and Stochastics, all of which likewise track the speed of price change over time.
Let us look at the momentum indicator found in MT4 and how it can be profitably used.
Momentum is calculated as a ratio of today s price to the price several periods ago MomPeriod .
MomPeriod is the only variable one can customize, and it is defaulted at 14.
For the sake of illustration, we will look at a daily chart of EURUSD with a MomPeriod 5 .
As you can see from the above chart, the current momentum is 101.
How is this calculated.
You are going to divide two closing prices the current close 1.
2394 , divided by the close of 5 bars prior 1.
2227 , which gives us 1.
0136; we then multiple 1.
0136 with 100 to give us 101.
Note that price had been travelling up, so our momentum value is above 100 or bullish; if price had been travelling down we would have had a momentum value less than 100 or bearish.
Three ways to use the Momentum indicator .
Momentum as a Trend-Following Oscillator 100 Line Pivot .
Bullish Signal is generated when the Momentum crosses above its 100 line and a bearish signal is generated when the Momentum crosses down the same line.
Signal Conditions Long Signal Previous Momentum 100 Mom Crossing Over 100 from Below Short Signal Previous Momentum 100 Mom Crossing Under 100 from Above .

admin

By itself, this strategy will tend to create too many signals to be profitable.
It works best with other conditions or filters, such as the 20 SMA suggested by Alexander Elder or any period MA deemed suitable via back-testing .
For instance, if the mom crosses over 100 from below, and the close is also above its 20 SMA, then a buy signal can be taken.
Reverse for the sell signal.
I would also suggest optimizing the MomPeriod for the particular pair and time frame you want to work your system upon.
There are maybe other periods more suitable than 14.
The default of 14 was chosen to reduce the noise of a volatile market without losing much of its advantage.
Indicator Descriptor MOM-TC_NEW.
Modified version of Momentum indicator that includes sound alerts and changes its colour when it s above or below 100.
Author Linuxer.
Momentum as a Leading Indicator of Exhaustion and Trend Reversal.
You can use the Momentum indicator as a trend-reversal indicator similar to RSI or Stochastics and their use of overbought oversold levels.
BUY when the indicator bottoms and turns up and SELL when the indicator peaks and turns down.
As there are no overbought oversold zones of 80 20 like RSI or Stochastics to determine possible bottoms or peaks, you instead have to test for different Overbought OB and Oversold OS levels that can work out, as in the table below .
Signal Conditions Long Signal Previous Mom 100 OSLevel Crossing over 100 OSLevel from below Long Signal Previous RSI 100 OBLevel Crossing under 100 OBLevel from above .
Note If the Momentum indicator reaches extremely high or low values relative to its historical values , you should assume a continuation of the current trend.
For example, if the Momentum indicator reaches extremely high values and then turns down, you should assume prices will probably go still higher.
In either case, only trade after prices confirm the signal generated by the indicator e.
, if prices peak and turn down, wait for prices to begin to fall before selling .
It is also a good idea to use this indicator in conjunction with a 100 or 200 period moving average.
You should buy and sell in the direction of the MA trend, as you can see in the EURUSD H1 chart below .
There are plotted 4 red arrows each to point out when momentum had reached relative low points bottoms and turned upwards in the direction of the main trend established by the 100 period moving average.
If you had missed getting on board the MA direction when the price crossed above it, the bottoms of the momentum become nice alternative entry points.
Any entry on momentum should be used cautiously with pre-defined stop losses.
The assumption that the trend will continue forever has been the downfall of many accounts.
Simply because the price has been going up or down does not mean it will continue in that direction forever.
If you buy at the end of a bull move or sell at the end of a bear move, the chances are it is going to be a losing trade, even if due consideration has been given to the momentum.
Momentum as a Leading Indicator Divergence .
This indicator can also be used as a leading divergence indicator much the same way as RSI and MACD can be used as leading divergence indicators.
This method assumes that market tops are typically identified by a rapid price increase when everyone expects prices to go higher and that market bottoms typically end with rapid price declines when everyone wants to get out .
As a market peaks, the Momentum indicator will climb sharply and then fall off, diverging from the continued upward or sideways movement of the price.
Similarly, at a market bottom, Momentum will drop sharply and then begin to climb well ahead of prices.
Both of these situations result in divergences between the indicator and prices.
Here is a simple table to define the different divergences .
Name Indicator Price Location 1.
Bullish Divergence Reversal Mom is making a higher low Price is making a lower low Mom Valleys 2.
Bearish Divergence Reversal Mom is making a lower high Price is making a higher high Mom Peaks 3.
Bullish Divergence Continuation Mom is making a lower low Price is making a higher low Mom Valleys 4.
Bearish Divergence Continuation Mom is making a higher high Price is making lower high.
Let us look at such a divergence in a H4 chart of EURUSD .
In the last buy signals in the above chart, Price had been making a Lower Low while the corresponding Mom had been making a High Low, which indicates Bullish Divergence Reversal Signal.
With the sell signals, Price had been making Higher High while Mom had been making a Lower High, which indicates a Bearish Divergence Reversal Signal.
Momentum is perhaps the simplest constructed indicator out there.
What can be simpler than taking the current close, dividing it by the close of x bars ago, and multiplying by 100.
You get to see at a glance the amount and speed by which prices have changed from x bars ago.
And the only variable to optimize is x, or MomPeriod.
As we have seen, there are at least three strategies that can be worked out with this type of indicator .
taking trades when mom crosses 100; taking trades when mom crosses down up through a predetermined overbought oversold zones; and taking trades on mom divergences from price action.
The first strategy is the most popular of the three, so it might be the best one to start testing.
But bear in mind, ROC Momentum has been unsteated in popularity by more sophisticated momentum indicators that followed it, such as RSI and stochastics.
This older simpler version of momentum has some merit, but you have to examine each of the three strategies related to it with a degree of skepticsm each must be backtested on different pairs across a sufficient period of historical data to determine if indeed they impart any edge factor.
Risk Warning Trading involves substantial risks, including complete possible loss of funds and other losses and is not suitable for everyone.