Momentum 4 Ways Smoothed [Salty]

The Momentum 4 Ways Smoothed [Salty] indicator provides a comprehensive view of market momentum by calculating and displaying four different momentum variations alongside their smoothed combined average. This tool allows traders to compare multiple timeframes and calculation methods simultaneously to identify trends and potential reversals with greater clarity.

Usage

The indicator can be used to gauge the strength and direction of momentum across various periods. By default, it plots four different momentum calculations, which can be toggled on or off to suit your analysis style.

• Momentum Values: Users can observe individual momentum lines calculated over different lengths (5, 10, 15, and 20 by default).
• Average Line: A central neutral line represents the raw average of the selected momentum values.
• Smoothed Average: The primary signal line is a smoothed version of the combined average. It is color-coded to show bullish (green) and bearish (red) transitions based on its directional slope.
• Zero-Line Crossings: Traders can use the zero line as a reference point; values above zero indicate positive momentum, while values below indicate negative momentum.

Details

This script implements four distinct momentum calculations:

1. Momentum 1-3: Standard price change (or VWAP change) over a specified period.
2. Momentum 4: Calculated based on the change in a Simple Moving Average (SMA) multiplied by its length, providing a smoother perspective on long-term momentum.

The tool allows for significant flexibility by offering a "Use VWAP" option, which replaces standard price inputs with Volume Weighted Average Price for the calculations. The combined average can be smoothed using SMA, EMA, WMA, or Linear Regression methods to filter out market noise.

Settings

General Settings

• Source: The price source used for calculations (default is OHLC4).
• Use VWAP instead of price: When enabled, the script uses VWAP as the base input for all momentum calculations.
• Show Momentum 1-4: Toggles for displaying the individual momentum lines.
• Show Average / Smooth Average: Toggles for the combined average and the smoothed signal line.

Calculation & Smoothing

• Moving Average Calculation: Select the smoothing method for the average line (1 = SMA, 2 = EMA, 3 = WMA, 4 = Linear Regression).
• Smoothing Moving Average Length: The lookback period for the smoothing calculation.
• Number of Momentum Values to use: Defines how many of the momentum calculations (1-4) are included in the final average.

Momentum Lengths

• Momentum Length 1-4: Independent lookback periods for each of the four momentum calculations.

FAQ

How do I use the smoothed line for trend direction?

The smoothed average line changes color based on its direction. When the line is green, momentum is increasing (bullish); when it is red, momentum is decreasing (bearish).

Can I use this for volume-weighted analysis?

Yes, by enabling the "Use VWAP instead of price" setting, all momentum calculations will be derived from VWAP instead of standard price data.

How can I access Momentum 4 Ways Smoothed [Salty]?

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