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?
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?
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?
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:
1
speed=MOMENTUM(malong–mashort)*100/CLOSE
is the same as
1
speed=MOMENTUM[12](malong–mashort)*100/CLOSE
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).
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?
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?
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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