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The T3 Momentum ATR Normalized indicator is a trading algorithm based on the interaction of the calculations of the Momentum and ATR indicators, which in turn are included in the standard set of Forex. Their calculations are smoothed using T3. The indicator is used to determine the direction and strength of the trend and open trades during this period directly. It is represented in the lower window of the price chart in the form of two lines: the main and signal lines, which, in turn, intersect and move in a certain direction, cross the signal levels. Taking into account the current values of the indicator, the direction and strength of the trend are determined, and with taking into account them, a certain position is opened.
The T3 Momentum ATR Normalized indicator is suitable for trading on any timeframe using any currency pair.
Input parameters
The settings of the T3 Momentum ATR Normalized indicator consist of several sections that affect the overall functioning of the indicator. Thus, the Input Parameters section is used to change the parameters of technical work, the Colors section is responsible for the visualization of lines and their color, while the Levels section is used to add to the window indicator of signal levels.
- momPeriod - Momentum indicator period value. The default value is 25.
- momPrice - price type to which Momentum indicator calculations are applied. Default value is 0.
- momSmooth - type of smoothing of Momentum indicator values. The default value is 3.
- momSmoothHot - deviation of smoothing values. The default value is 0.7.
- momSmoothOriginal - parameter to use standard smoothing of indicator values. Default value is false.
- SignalPeriod - indicator signal line period. The default value is 9.
- SignalMethod - method for smoothing the signal line of the indicator. The default value is 0.
- Levels - value of the signal levels of the indicator. The default value is 5.0.
Indicator signals
The algorithm for using the T3 Momentum ATR Normalized indicator is very simple. To open a certain trade using the indicator, it is enough to determine the direction and strength of the current trend. To do this, it should be taken into account the general direction of the indicator lines, their intersection and location relative to signal levels. If indicator determines an uptrend, long positions are considered to be opened, if the trend is down, short positions. When the direction of the current trend changes, in both cases, trades are closed.
Signal for Buy trades:
- The indicator lines are moving up, above level 0, while the main line is above the signal line.
Upon receipt of a combination of such conditions on a signal bullish candle, a buy trade may be opened, due to the presence of a strong uptrend in the current market. At the moment the trend direction changes, namely at the next intersection of the lines, the trade should be closed. At this moment, the indicator makes it possible to consider opening new trades.
Signal for Sell trades:
- The indicator lines cross so that the signal line is higher than the main one. At the same time, both lines move down, dropping below the 0 level.
When a combination of such conditions is received on a signal candle, a sell trade can be opened. At this moment, a strong downtrend is determined in the market. Such a trade should be closed upon receiving the opposite conditions from the indicator. At this moment, a possible trend change is determined, which in turn will allow considering the opening of new trades.
Conclusion
The T3 Momentum ATR Normalized indicator is a very effective trading algorithm designed for trading during a certain market trend. In order to gain the necessary trading skills and correctly apply the trading algorithm, preliminary practice on a demo account is recommended.
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