Chande Momentum Oscillator + WaveTrend Oscillator
Nov 3, 2019
The Chande Momentum Oscillator + WaveTrend Oscillator indicator combines two powerful momentum-based oscillators into a single tool to help traders identify trend exhaustion, potential reversals, and momentum shifts.
Usage
This script displays two primary components: the Chande Momentum Oscillator (CMO) with its signal line, and the WaveTrend Oscillator. Traders can use these components in tandem to find high-probability entry and exit points.
- CMO Overbought/Oversold: A potential selling point occurs when the CMO rises above the upper red dotted line (+50). Conversely, a buying opportunity may exist when the CMO falls below the lower green dotted line (-50).
- CMO Crossovers: Use the crossover between the CMO (green line) and its signal line (red line) to identify momentum shifts. A cross above the signal line is bullish, while a cross below is bearish.
- WaveTrend Confirmation: The WaveTrend line (blue) serves as a secondary confirmation. A robust buy signal occurs when the WaveTrend line is above the center line and the CMO has crossed over its signal line. A sell signal is indicated when the WaveTrend line is below the center line and the CMO is under its signal line.
Details
The indicator calculates the Chande Momentum Oscillator by measuring the difference between the sum of all recent gains and the sum of all recent losses, then dividing by the total of all price movement over the same period. This results in a value between -100 and +100.
The WaveTrend component is based on the concept of calculating the relationship between the price and its exponential moving average, adjusted by the mean absolute deviation. This helps in smoothing out market noise while identifying cycles in price action. By overlaying both, the indicator aims to filter out false signals provided by a single oscillator.
Settings
WaveTrend Settings
- Channel Length: Determines the period used for the initial EMA and deviation calculations in the WaveTrend component.
- Average Length: Sets the smoothing period for the WaveTrend calculation.
- RSI Source: The price source used for the WaveTrend calculation (e.g., Close, Open, High, Low).
Chande Momentum Settings
- Chande Momentum Length: The lookback period used to calculate the CMO gains and losses.
- Chande Momentum Signal: The length of the Simple Moving Average (SMA) applied to the CMO to create the signal line.
FAQ
How do I access Chande Momentum Oscillator + WaveTrend Oscillator?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
What do the horizontal lines represent?
The horizontal lines at +50 and -50 represent overbought and oversold thresholds for the CMO, while the 0 line represents the equilibrium point for both oscillators.
Can I use this for any timeframe?
Yes, the indicator is designed to be versatile across various timeframes, though users should adjust the lengths in the settings to better suit specific asset volatility or trading styles.
Trading & investing are risky and many will lose money in connection with trading and investing activities. All content on this site is not intended to, and should not be, construed as financial advice. Decisions to buy, sell, hold or trade in securities, commodities and other investments involve risk and are best made based on the advice of qualified financial professionals. Past performance does not guarantee future results.
Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, including, but not limited to, lack of liquidity. Simulated trading programs in general are designed with the benefit of hindsight, and are based on historical information. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
As a provider of technical analysis tools and strategies, we do not have access to the personal trading accounts or brokerage statements of our customers. As a result, we have no reason to believe our customers perform better or worse than traders as a whole based on any content, tool, or platform feature we provide.
Charts used on this site are by TradingView in which the majority of our technical indicators are built on. TradingView® is a registered trademark of TradingView, Inc. www.TradingView.com TradingView® has no affiliation with the owner, developer, or provider of the Services described herein.
Market data is provided by CBOE, CME Group, BarChart, Massive, CoinAPI. Select U.S. equities data is provided through Massive. CBOE BZX real-time U.S. equities data is licensed from CBOE and provided through BarChart. Real-time futures data is licensed from CME Group and provided through BarChart. Select cryptocurrency data, including major coins, is provided through CoinAPI. All data is provided “as is” and should be verified independently for trading purposes.
This does not represent our full Disclaimer. Please read our full disclaimer.
© 2026 LuxAlgo Global, LLC.