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The Corrected Momentum indicator is a trading algorithm, the calculations of which are based on the use of the standard Momentum forex with an additional filter for correcting calculations. The indicator is used in trading to identify the direction and strength of the current trend, which in turn helps to determine the moment of opening a trade. Corrected Momentum is represented in the lower window of the price chart as four intersecting lines: the main line, the correction line and two signal lines. Taking into account some values of the lines, including their direction, color and intersection, the current trend is determined and certain trades can be opened.
The Corrected Momentum indicator can be used on any timeframe with any currency pair.
Input parameters
There are several sections in the settings of the Corrected Momentum indicator, each of which is responsible for its general functioning. The Input parameters section is responsible for the values of its technical work, the Colors section is used to change its general visualization, the Levels section is used to add signal levels to the indicator window.
-Momentum period - period of calculation of the Momentum indicator. The default value is 32.
-Correction period (<0 no correction =0Tur same as momentum period) - correction period for indicator calculations. The default value is 0.
-Price - type of the price to which the indicator's calculations are applied. By default, it has the Close value.
-Color change on: - a parameter that indicates the moment when the color of the main line of the indicator changes. By default, it has the Change color on outer levels cross value.
-Levels period - period of signal levels of the indicator. The default value is 25.
-Upper level % - the value of the upper signal level in percent. The default value is 90.0.
-Lower level % - the lower signal level of the indicator. The default value is 10.0.
-Turn alerts on? - parameter to have a notification when a signal is received. The default value is false.
-Alert on current bar? - signal parameter on the current bar. By default, it is set to true.
-Display messages on alerts? - the parameter to have a notification in the form of a message in the price chart window when a signal is received. The default value is true.
-Play sound on alerts? - the sound notification parameter when receiving a signal. The default value is false.
-Send email on alerts? - the option to receive the signal as an e-mail. The default value is false.
-Send push notification on alerts? – parameter for sending a push notification when receiving a signal. The default value is false.
Indicator signals
To open a certain trade using the indicator, it should be taken into account the direction and strength of the current trend, which in turn are determined taking into account the values of the indicator. Thus, before opening a certain trade,it should be taken into account the direction of the indicator lines, their intersection and the color of the main and correction lines. If the current trend upward, long positions are opened, if the trend is downward, short positions are opened. When the direction of the trend changes, trades are closed.
Signal for Buy trades:
- The indicator lines are directed upwards. The correction line is higher than the main one, while both lines have a color with a growth value. The upper signal level is higher than the lower one.
Upon receipt of such conditions, a buy trade can be opened on a signal candle, due to the presence of an upward trend in the current market. Upon receipt of a reverse intersection of the lines, that is, at the moment the current trend changes, the current trade should be closed and a new one should be considered.
Signal for Sell trades:
- The indicator lines move from top to bottom so that the correction line is lower than the main one, while both lines have a color with a fall value. The lower signal line is higher than the upper one.
A sell trade can be opened when a full combination of such conditions is received on a signal candle. At this moment, a downward trend is determined in the market. The trade should be closed when the current trend changes, namely, when the indicator gives a reverse signal. This, in turn, will allow considering opening new trades.
Conclusion
The Corrected Momentum indicator is very effective, since its calculations are based on the correction of a standard indicator, the accuracy of which has been proven by time. The indicator is very easy to use, however, practice on a demo account is recommended before trading on a real deposit.
