Trend Momentum with Buyers / Sellers Power

The Trend Momentum with Buyers / Sellers Power indicator is a comprehensive momentum-based tool designed to identify emerging trends and the relative strength of market participants by combining normalized RSI and momentum data.

Usage

This tool identifies trend strength and direction through the interaction of a gray momentum line and a red smoothed RSI line relative to a zero baseline.

• Bullish Momentum: A powerful uptrend is signaled when the gray momentum line crosses above the red smoothed RSI line, particularly when this occurs above the zero baseline.
• Bearish Momentum: A powerful downtrend is signaled when the gray line crosses under the red line, especially when both are below the zero baseline.
• Signal Filtering: For higher conviction, traders typically look for Buy signals when the interaction occurs above or is crossing up through the zero baseline, and Sell signals when below or crossing down through the zero baseline.
• Exhaustion & Reversals: When both lines are at extreme distances from the baseline and begin to converge or return toward zero, it suggests the current trend is weakening, potentially leading to a ranging market or a trend reversal.

Details

The script functions by calculating a standard RSI and a Momentum value. These values are then integrated where the RSI is scaled by a factor derived from the momentum value. Both components are smoothed using Weighted Moving Averages (WMA) to reduce noise.

The relationship between the smoothedM (Momentum) and smoothedR (RSI-based power) creates a dynamic oscillator. Because the RSI component is multiplied by a momentum-derived index, the indicator effectively weights price velocity against relative strength, helping to highlight when price movements are backed by significant market power.

Settings

Main Settings

• Momentum Length: Sets the lookback period for the core momentum calculation.
• RSI Length: Sets the lookback period for the Relative Strength Index calculation.
• Smooth Rsi: Determines the period of the WMA used to smooth the RSI-based component.
• Smooth Momentum: Determines the period of the WMA used to smooth the Momentum component.

FAQ

How do I use the Trend Momentum with Buyers / Sellers Power?

You can use it to identify trend starts by watching for crossovers relative to the zero baseline. It is best used on higher timeframes like 1H, 4H, or Daily to filter out market noise.

What do the colored circles represent?

The green circles represent bullish trend signals where momentum has crossed over the smoothed RSI value above the baseline. Red circles represent bearish signals where momentum has crossed under the smoothed RSI value below the baseline.

How can I get access to this tool?

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