Excessive Momentum Indicator MT5
Excessive Momentum Indicator is probably the first indicator to measure the excessive momentum in the financial market. Excessive Momentum Indicator was developed by Young Ho Seo from the original concept to the strategy implementation. This indicator demonstrates the concept of Equilibrium Fractal Wave as well as the practical application to trading. Excessive Momentum in the market can tell you about the psychology of crowd and it will reveal the potential future market direction. Therefore, you can base your trading decision with the excessive momentums. This indicator will spot where the excessive momentum happens in your chart. This indicator will provide the most probable turning point scenario or continuation scenario for your trading.
There are three setting groups in the indicator. You can use the default settings for most of time. Using the indicator is extremely simple but it is powerful tool for advanced trading setup.
A. Indicator settings
- Bars To Scan: amount of candle bars to calculate the indicator
- Timeframe for Calculation: timeframe choice for indicator calculation
- Momentum Strength Factor: Momentum Strength is the strength of Excessive Momentum to detect (higher momentum strength factor means larger excessive momentum strength and therefore, you will get fewer patterns to trade)
- Detrend Period: detrending period for the Trend filtered ZigZag indicator
- ZigZag Depth: depth for the Trend filtered ZigZag indicator
B. Graphic settings
- Use White Chart: to use white chart, set to true, otherwise, just set to false
- ZigZagColor: color for the Trend filtered ZigZag indicator
- ZigZagWidth: width for the Trend filtered ZigZag indicator (set to 0 to hide ZigZag lines from your chart)
- Excessive Momentum Right Extension in Bar: Right extension in bars for EM Level
- Excessive Momentum High Color: Excessive Momentum line color for C’ > C
- Excessive Momentum High Width: Excessive Momentum line width for C’ > C
- Excessive Momentum Low Color: Excessive Momentum line color for C’ < C
- Excessive Momentum Low Width: Excessive Momentum line width for C’ < C
- Fill Momentum Triangle: Fill the triangles
C. Alert settings
- Enable sound Alert: enable sound alert
- Send email: enable email alert
- Send notification: enable push notification
How to use the indicator
I have denoted the level where excessive momentum starts as the point C. The level of excessive momentum is denoted as point C’. C-C' is where the ZigZag and the price start to get spread apart. The detection of excessive momentum will provide you the key clue for your trading direction. With excessive momentum indicator, you can detect four phases in time order:
- Phase 1: Potential Turning Point arrival with C-C’ identification. (This is detected when the ZigZag and actual price start to spread apart.)
- Phase 2: Turning Point confirm with C-C’ Confirmation
- Phase 3: D Level detection
- Phase 4: D level confirmation
Phase 1 will provide you the potential turning point opportunity. Phase 2 and phase 3 will arrive almost simultaneously. Then Phase 4 will comes. After the phase 4, the price can make the potential breakout at either C level or D level. In simple words, you can aim to predict the turning point at phase 1. Then you will be watching out the D level and C level for the ultimate breakout for your trading after phase 4. Whether you take the position at phase 1 is optional and it will depend on your skills for predicting turning points.
Importance of Event Arrivals in time order (Queuing Theory View of Trading)
For the turning point to happen, price needs to go through some events. For example, to get rain, enough evaporation of water must go into air first. Then the water in air must be condensed enough for the drop second. Phase 1 to 4 are the must events before the turning point or continuation happens. In your trading, you might expect to have these four phases in order. If not, then you may revise your position. For example, if you entered at turning point in phase 1 with harmonic pattern plus or turning point detector together, then you will expect to have Phase 2 pretty soon. If not, then you need to revise your position. In addition, to complete turning points, the price must breakout at D level. If it breakout at C level, it is rather continuation pattern.