The Anchored Momentum technical indicator is a smoothed momentum indicator calculated based on the values of a moving average.
The Momentum indicator smoothed to filter market noise and eliminate bad trading signals
Formula
Anchored Momentum = 100 * (EMA [Price, EmaPeriod] / [ADM Price, SmaPeriod] - 1
Interpretation Of Signals And Rules trading
- buy signal
. the curve Anchored Momentum crosses down the oversold level and then passes again on the rise this level - Trend bullish
. the Anchored Momentum breaks curve upward the level + 0025 green color points - Trend bullish
. Divergence bullish: the price is down (again above lower) and Anchored Momentum indicator up (new higher low) .A correction to the price increase is expected - Trend bullish
- sale signal
. the line Anchored Momentum crosses upwards the overbought level and then passes back to lower that level - trend bearish
. the Anchored Momentum curve breaks down the line level -0.025 points red - Trend bearish
. bearish divergence: the price is rising (new higher low) and Anchored Momentum indicator down (again above lower) .A downward correction of prices is expected - Trend bearish
advice: do not trader when the line Anchored Momentum is between 0025 -0025 levels (flat area points of gray)
Read more:
. Trader - Momentum
Trading Analysis
Trade Example
Exchange
Forex Currency - Cross USD / CHF
Time Frame: 4 hours - h4
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