SMI Stochastic Momentum Index 2x set per Baiynd

The SMI Stochastic Momentum Index 2x set per Baiynd indicator provides a dual-layered True Strength Index (TSI) approach designed to capture both short-term and slightly higher timeframe momentum trends simultaneously. By combining two distinct SMI sets with customized Simple Moving Average (SMA) signal lines, this tool aims to identify potential support and resistance levels directly within the oscillator's movement.

Usage

The tool is primarily used to identify trend direction and momentum exhaustion through the relationship between the SMI lines and their respective signal lines.

• Zero Line Crossings: Generally, when the SMI lines are above the black dashed zero line, the momentum is considered bullish (long bias). Conversely, values below the zero line suggest a bearish (short bias) environment.
• Neutral Zones & Extremes: Gray horizontal lines at +0.25 and -0.25 represent a neutral zone. Momentum shifts are often more significant when they occur outside this range, particularly near the red (overbought) or green (oversold) threshold lines.
• Dual Timeframe Perspective: The indicator plots two sets of SMI. The primary set (4/20) reflects faster price action, while the secondary, darker set (6/40) provides a perspective on a slightly higher timeframe.
• Slope Interpretation: The steepness of the SMI plots relates directly to price momentum; steeper slopes indicate stronger, more aggressive price movements.
• Support/Resistance: A unique feature of this implementation is that the moving average signals often act as dynamic support or resistance for the SMI line itself. Price often pauses or reverses when the SMI encounters its own signal line.

Details

This indicator is based on the SMI Ergodic Oscillator but modified following interpretations of Anne-Marie Baiynd’s methodology. Specifically, it replaces the standard signal line calculation with a Simple Moving Average (SMA). The script calculates two separate TSI/SMI values using different period lengths to provide a layered view of market momentum. The default signal length is optimized to roughly four times the short period length to better reflect price action support and resistance.

Settings

• Short Period: The short-term EMA length used in the fast TSI calculation.
• Long Period: The long-term EMA length used in the fast TSI calculation.
• Signal Line Period: The length of the Simple Moving Average applied to the fast TSI.
• Slow Short Period: The short-term EMA length used in the secondary (slower) TSI calculation.
• Slow Long Period: The long-term EMA length used in the secondary (slower) TSI calculation.
• Slow Signal Line Period: The length of the Simple Moving Average applied to the secondary TSI.

FAQ

How do I use the two different SMI sets?

The lighter blue and orange lines represent the fast momentum set, while the darker blue and purple lines represent the slower, higher-timeframe momentum. Look for alignment between both sets for stronger confirmation of a trend.

What do the colored horizontal lines signify?

The red line indicates overbought territory, the green line indicates oversold territory, and the gray lines define the neutral zone between +0.25 and -0.25.

How can I access the SMI Stochastic Momentum Index 2x set per Baiynd?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.