The ATR and Volume adjusted momentum oscillator include a ratio made of 2 double smoothed exponential average of the momentum compared to the absolute one.
The AbsMtm is a calculation of the momentum weighted with Volumes. So this technical indicator should be used on a security that deals with Volumes.
Trading signals can be compared to the MACD, the main oscillator is in histogram, while the signal line is a curve. Bullish and bearish signals are made with cross over and cross under the histogram and the signal line. You can also wait for the histogram to cross the 0 line which represents the frontier between the buyers and the sellers.
Translation of a MetaStock code by a request in the Spanish forum.
//PRC_ATR&Volume adjusted Momentum | indicator
//Nicolas @ www.prorealcode.com
//Sharing ProRealTime knowledge
//translated from Metastock code
// --- settings
//avgType=0 //moving average type
//--- end of settings
Mtm = (Close - close[momp] )/AverageTrueRange[momp]
AbsMtm = (abs ( mtm)+ abs(Volume-volume[momp]))
NumE = exponentialaverage[p2](exponentialaverage[p1](mtm))
DenE = exponentialaverage[p2](exponentialaverage[p1](absmtm))
Bensu = 100*(NumE/DenE)
if volwma>0 then
r = 100-(volwma)*2
g = 150+abs(volwma)*2
r = 150+abs(volwma)*2
g = 100-abs(volwma)*2
RETURN volwma coloured(r,g,0) style(histogram) as "VOLUME ADJUSTED MOMENTUM", signal style(line,2) as "Signal line"
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