Momentum Decay Field

The Momentum Decay Field indicator models price momentum as a decaying physical energy field using an exponential half-life model to visualize exhaustion and energy divergence. By treating impulse energy as a radioactive isotope that loses charge over time, this tool provides a unique perspective on momentum lifecycles directly on the price chart.

Usage

The Momentum Decay Field can be used to identify when a trend is losing fuel or when price moves are overextended.

• Impulse Detection: The tool identifies high-conviction moves (Diamonds) based on candle body size, range, and volume. These serve as the "injection" of energy into the decay model.
• Energy Field Interpretation: The colored aura around price expands when momentum is high and contracts as it decays. Use the color transitions (Directional → Amber → Gray) to gauge the current strength of a move.
• Exhaustion Signals: The EXH marker appears when energy falls below a specific threshold (default 8%), suggesting the current impulse has been fully consumed.
• Momentum Divergence: The WEAK signal highlights "energy divergence"—where price makes a new extreme but with significantly less energy than the previous impulse, often foreshadowing a pause or reversal.
• Memory Zones: Past exhaustion levels are stored as semi-transparent rectangles. These zones represent historical areas where momentum failed and can act as future support or resistance.

Details

The engine is built on the exponential decay formula from nuclear physics: $E(t) = E0 \times e^{(-\lambda \times t)}$.

• E0 (Initial Energy): Calculated from body magnitude, velocity, and volume.
• Half-Life: The number of bars required for energy to decay by 50%.
• Adaptive Half-Life: Stronger impulses are automatically assigned a longer half-life, mirroring how institutional moves sustain momentum longer than retail noise.

Settings

Impulse Detection

• Impulse Lookback: ATR period used for baseline qualification.
• Impulse Threshold (x ATR): Minimum candle magnitude required to trigger an impulse.
• Velocity Window: Number of bars used to measure directional speed.

Decay Physics

• Base Half-Life (bars): The core decay rate for energy depletion.
• Adaptive Half-Life: Automatically scales half-life based on impulse strength.
• Exhaustion Threshold: The energy ratio level that triggers an EXH signal.

Visual Settings

• Visual Mode: Choose between Clean (signals only), Standard (field + spine), and Full (all layers + candle tinting).
• Max Field Width (x ATR): Sets the maximum expansion of the energy aura.
• Field Base Opacity (%): Controls the visibility of the field layers.

FAQ

How do I access Momentum Decay Field?

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

Does this indicator repaint?

No. The indicator uses only confirmed historical data from completed bars. No future data is referenced, and calculations do not change retroactively.

Can I use this for swing trading?

Yes. While defaults are optimized for intraday (1m-15m), you can increase the Base Half-Life and Impulse Threshold to focus on significant moves on 1-hour, 4-hour, or Daily timeframes.