This script is a basic up/down indicator to tell you which way momentum has shifted, this should be used as part of another system to add confluence to your already existing long or short thesis. Uses a simple algebraic equation to define the momentum and when up or down has shifted above/below the other.
Combine this with an MA strategy to get entries for a good hit rate. Typically used for intraday but you can still use this as an indicator for higher time frames.
Crypto is very volatile and momentum can shift within a few minutes which is why you will see some failed signals, but typically it works very well for catching the big moves in crypto as momentum becomes very strong due to FOMO etc..
how do you set correctly set an alert on this indicator? when the line crosses down/up?
thehamsauce
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any chance you will make this indicator open sourced?
mattmaniac
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Thanks for sharing this! I have used this with some success combined with the MAST Trend Indicator. What other indicators / strategies do you like to use with this? Do you use it primarily with the 3 minute chart?
neverbot
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@mattmaniac, Hey, I am not familiar with the MAST trend indicator, but using this together with a trend indicator can work well, I typically use momentum to tell me which way to trade and then use something else (some kind of trend/ma/SR level) to give me entries, it really just tells you if the momentum has flipped to bullish/bearish and ofc in choppy periods this will be all over the place. 3 mins is a bit low for me but it depends on the instrument I guess, I like this on 30m/45m/1H for Crypto. Forex is too choppy for this, some Commodities work well.
mattmaniac
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@neverbot, thanks for the reply. I have learned 3 min is too low as well to find a decent entry. Definitely works well when combined with other indicators. Thanks again.