Momentum indicators are built with trend indicators, tracking short-term overbought or oversold conditions. In general, when the oscillator value approaches the upper extreme the instrument will be overbought, and as it approaches the lower extreme it will be oversold.
The Quantitative Qualitative Estimation ( QQE ) indicator is an offspring from Wilder’s famous Relative Strength Index ( RSI ). The base plot is an RSI smoothed over 5 periods supplemented by a signal line. The signal line is composed of a moving Average True Range (ATR). By smoothing the QQE and signal lines, the…
The Fast Stochastic is a momentum indicator developed by George Lane. On momentum, Lane is quoted as saying: “If you visualize a rocket going up in the air – before it can turn down, it must slow down. Momentum always changes direction before price.“ Therefore, stochastic setups are used in situations where a momentum fall-off may…
In this Indicator Spotlight, we’re looking at the Z-score and how you can use it to normalize oscillator values. Specifically, we’ll show the Z-score can be used to condition entry and exit conditions for an Awesome Oscillator strategy. To learn more about the general idea behind the Z-score and how to apply it to the…
In this post we’re discussing the Kaufman Efficiency Ratio and how it relates to determining market momentum, specifically the Balanced Momentum calculation