How to measure the strength of a cross over ? Momentum ?

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  • 03/05/2019 at 3:42 PM #92895
    mancunian

    I am trying to measure the strength of a simple moving average crossover and I have seen the following in PRT manual:

     

    REM Compute the differential speed between the short and the long moving average
    speed = MOMENTUM(malong–mashort) * 100 / CLOSE
    but when I look in the PRT manual index it shows that the indicator  MOMENTUM requires only 1 parameter n which is the number of periods previous when comparing the current closing price to a previous period??
    How can MOMENTUM have two parameters, is it any good at measuring the strength of a cross over and what should the range of values be please for a weak to strong cross over and cross under?
    Thanks in advance

     

    03/05/2019 at 4:27 PM #92903
    robertogozzi

    It seems that 1 parameter is enough for the classic MOMENTUM indicator: https://en.wikipedia.org/wiki/Momentum_(technical_analysis).

     

    03/05/2019 at 4:51 PM #92905
    mancunian

    Roberto thank you.

    But PRT manual for Screener and auto trading shows MOMENTUM having 2 parameters – slow and fast moving averages and I am keen to use it to measure the strength of a crossover – but I am confused!  I have also seen this in the library on this website https://www.prorealcode.com/prorealtime-market-screeners/4-and-9-day-crossover/

    speed = MOMENTUM(malong–mashort) * 100 / CLOSE

    What calculation takes place with 2 parameters and how does this measure the strength of a cross over?

    03/05/2019 at 5:21 PM #92907
    robertogozzi

    They are not 2 parameters.

    It’s an expression which is evaluated first, then the result is  served to the indicator.

    03/05/2019 at 5:30 PM #92908
    mancunian

    Roberto – you are correct of course thank you – I need more coffee as my concentration is slipping!

    But if MOMENTUM normally accepts the number of periods as a parameter why would you use the difference of 2 moving averages as this is simply a a price difference number and not a time period???

    I would love to understand this more before I use it and what the corresponding output range of values may be and what they mean?

    03/05/2019 at 5:42 PM #92909
    Nicolas
    mancunian wrote:

    why would you use the difference of 2 moving averages as this is simply a a price difference number and not a time period???

    To calculate the momentum of the difference of these 2 MA.

    Anyway, you can compute the momentum of everything, look at this page: https://www.prorealcode.com/documentation/momentum/

    03/06/2019 at 2:09 PM #92983
    mancunian

    Maybe I missing something obvious here but if

    momentum = Moving Average Long – Moving Average Short    : as an absolute number or

    momentum = (Moving Average Long – Moving Average Short) *100/Close     :as a percentage

     

    then the PRT manual is wrong when it looks at the strength of a cross over and says

    “speed = MOMENTUM(malong–mashort) * 100 / CLOSE”

     

    surely it should say

    “speed=malong -mashort” OR

    “speed=(malong–mashort) * 100 / CLOSE”

     

    Any feedback is appreciated

    03/07/2019 at 9:19 AM #93034
    Nicolas

    You are right, I think that it is not mentioned anywhere in the documentation. For the Momentum indicator, if the period is not defined, it is automatically adjust to 12 periods, so:

    is the same as

    EDIT: after some research, it is indeed the case for any indicator, if you don’t specify a period, the default one is used (e.g. 14 periods for RSI).

    03/07/2019 at 2:29 PM #93062
    mancunian

    Nicolas thank you very much for your assistance.

    It is still unclear to me whether the parameter N used with Momentum[N] is a time period or a price or something else as some places seem to say it is a time period and others a price.

    e.g. N = 5 periods on a 1 minute chart so Momentum[5] would compare the current price with the price 5 minutes ago

    i.e.Price now – Price 5 minutes

    OR

    N= slowmovingaverage-fastmovingaverage – so Momentum[slowmovingaverage-fastmovingaverage] would calculate what exactly? – what is the formula?

     

    I am still confused sorry.

    03/07/2019 at 3:10 PM #93065
    Nicolas

    Brackets are different from parenthesis !

    [Period of calculation] (data for the calculation)

    03/07/2019 at 3:34 PM #93072
    robertogozzi

    This will return the 14-period Momentum of the difference, 5 bars ago, between two MA’s (so difference from bars 14 through 18):

     

    03/07/2019 at 4:36 PM #93081
    mancunian

    Aha thank you.

    So if I have understood this correctly

    speed = MOMENTUM[12](malong–mashort)

    the calculation is speed=(malongcurrent – mashortcurrent) -(malong12periodsago-mashort12periodsago)

     

    Correct?

     

     

    03/07/2019 at 4:59 PM #93082
    robertogozzi

    Right!

    03/11/2019 at 10:06 PM #93396
    mancunian
    robertogozzi wrote:

    This will return the 14-period Momentum of the difference, 5 bars ago, between two MA’s (so difference from bars 14 through 18):

    Sorry I do not think this is correct as the manual says the parameter I for Momentum(I) is an indicator slowma[5]-fastmav[5] is a number not an indicator.

    Maybe Momentun[14](slomav[5])- Momenum[14](fastma[5]) is the correct way to measure the strength/speed of the crossover?

    03/13/2019 at 9:42 AM #93504
    mancunian

    Sorry to ask again but can anybody please clarify how the Momentum indicator works with moving averages?

     

    The PRT provides little help and contradicts itself.

    The PRT manual says that the parameter it accepts is an indicator but then it shows an example with moving averages where a number (the difference between 2 moving averages) is used as a parameter which is not an indicator but just a simple number?!

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