The Momentum SMA indicator combines Momentum and Simple Moving Average (SMA) calculations to assess an asset's potential directional momentum.
Momentum Line: Calculates the rate of change in the asset's price.
Average Line: Represents the Simple Moving Average of this momentum.
Zero Line: Can act as a neutral baseline to help differentiate between potential bullish and bearish conditions.
Parameters:
Price: By default, the indicator uses the closing price for its calculations, but this can be changed to High, Low, Open, Volume, or VWAP to suit different analysis needs.
Momentum Length: The indicator initially uses a 28-period setting for calculating momentum, offering flexibility to adjust according to individual trading strategies.
SMA Length: Initially set to a 28-period length for the Simple Moving Average, this parameter can be adjusted to better align with specific trading objectives.
Momentum SMA Indicator subgraph on chart
*Please note that these observations are for informational purposes and should not be construed as financial advice.