Momentum Index

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Momentum Index - Advanced Market Momentum Detector

This indicator combines two specialized oscillators to detect market momentum shifts with high precision. Unlike standard momentum indicators, it integrates both short-term volatility analysis and longer-term trend strength to provide a comprehensive view of market dynamics.

How It Works

The Momentum Index measures directional power through a dual-oscillator system:
A short-term volatility oscillator compares upward movement power (high minus previous low) against downward movement power (low minus previous high), normalized by ATR to ensure volatility independence.
A longer-term trend oscillator uses logarithmic price relationships to detect underlying trend strength through two complementary methods.

These oscillators are normalized, averaged, and enhanced with a momentum acceleration component for increased sensitivity to directional changes.

Trading Signals

The critical signal occurs when the indicator crosses the 50 line:
Crossing ABOVE 50: Bullish momentum is now dominant (green histogram)
Crossing BELOW 50: Bearish momentum is taking control (red histogram)

These crossings often precede significant price movements, making them valuable for both trend confirmation and early reversal detection.

Customization Options

Length: Adjusts the short-term oscillator sensitivity (default: 6)
Smoothing: Enables Ehlers smoothing to reduce noise
Smoothing Period: Controls the smoothing intensity
Display Options: Show as histogram or line

For optimal results, use on any timeframe from 15-minute to daily charts across all major markets. The indicator works particularly well for identifying momentum shifts at key support/resistance levels.

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Bug Fix

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Length no longer limited to 100