Strength Momentum Index

This indicator will show the momentum of the macro market based on timeframes.

How to use:

The histogram shows the trend of the market, which can help understand who is in control. If the bulls are in control, on the larger timeframes, the histogram will be flipped to green. If the bears are in control, it will stay in red.

When zooming in to lower timeframes, you will be able to use the baseline 0 as a buy signal to buy the dip.

When zooming out to larger timeframes, you will be able to see when you should be leaving the trade. If larger timeframes starting to flip to red histogram with excessive sell, you will most likely see a downturn.

The red 2 line is the signal line for entry.

Yellow is the warning line signaling pause or pullback.

Green is the warning line for signaling oversold and pause may happen.

Divergences:

Divergence could be found similar to RSI or MACD.

• If price goes lower while histogram goes higher, it's bullish divergence.
  If price goes higher while histogram becomes lower, then it is bearish divergence.
  

Logic:

This was built on top of relative strength index to easily identify the marcro trading trends. If price were to shoot in one direction in a short duration of time, it is generally not sustainable. Hence, the pull back/pause in the price action. while in one side of the marcro trend, price could and generally will continue to trend in one direction until large sums of orders have been filled and change the direction of the market.

I took consideration of the stock market when creating this indicator. It should generally work with all markets and timeframes.

When use, please adjust this between the timeframes and asset classes to determine the best case approach.

THIS IS NOT A ONE STOP SHOP FOR YOUR ENTRY AND EXITS.

This is change from the conventional technical indicators to lessen the failure rate as we approach the ever changing markets.

Word of advice: to continuously increase your equity curve, the most important skill you need to learn is discipline. Trade with risk and reward ratio in mind. Do not assess and approach trade without targets and stoploss in mind.

This indicator will be regularly updated to include improvements, adjustments and others that will benefit the users.