HPotter

CMO & WMA Oscillator

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This indicator plots Chandre Momentum Oscillator and its WMA on the
same chart. This indicator plots the absolute value of CMO. CMO was
developed by Tushar Chande. A scientist, an inventor, and a respected
trading system developer, Mr. Chande developed the CMO to capture what
he calls ?pure momentum". For more definitive information on the CMO and
other indicators we recommend the book The New Technical Trader by Tushar
Chande and Stanley Kroll.
The CMO is closely related to, yet unique from, other momentum oriented
indicators such as Relative Strength Index , Stochastic , Rate-of-Change,
etc. It is most closely related to Welles Wilder?s RSI , yet it differs
in several ways:
- It uses data for both up days and down days in the numerator, thereby
directly measuring momentum;
- The calculations are applied on unsmoothed data. Therefore, short-term
extreme movements in price are not hidden. Once calculated, smoothing
can be applied to the CMO, if desired;
- The scale is bounded between +100 and -100, thereby allowing you to clearly
see changes in net momentum using the 0 level. The bounded scale also allows
you to conveniently compare values across different securities.
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////////////////////////////////////////////////////////////
//  Copyright by HPotter v1.0 17/04/2014
//    This indicator plots Chandre Momentum Oscillator and its WMA on the 
//    same chart. This indicator plots the absolute value of CMO. CMO was 
//    developed by Tushar Chande. A scientist, an inventor, and a respected 
//    trading system developer, Mr. Chande developed the CMO to capture what 
//    he calls ?pure momentum". For more definitive information on the CMO and 
//    other indicators we recommend the book The New Technical Trader by Tushar 
//    Chande and Stanley Kroll.
//    The CMO is closely related to, yet unique from, other momentum oriented 
//    indicators such as Relative Strength Index, Stochastic, Rate-of-Change, 
//    etc. It is most closely related to Welles Wilder?s RSI, yet it differs 
//    in several ways:
//    - It uses data for both up days and down days in the numerator, thereby 
//        directly measuring momentum;
//    - The calculations are applied on unsmoothed data. Therefore, short-term 
//        extreme movements in price are not hidden. Once calculated, smoothing 
//        can be applied to the CMO, if desired;
//    - The scale is bounded between +100 and -100, thereby allowing you to clearly 
//        see changes in net momentum using the 0 level. The bounded scale also allows 
//        you to conveniently compare values across different securities.
////////////////////////////////////////////////////////////

study(title="CMO & WMA", shorttitle="CMO & WMA")
Length = input(9, minval=1)
LengthWMA = input(9, minval=1)
hline(0, color=gray, linestyle=line)
xMom = abs(close - close[1])
xSMA_mom = sma(xMom, Length)
xMomLength = close - close[Length]
nRes = 100 * (xMomLength / (xSMA_mom * Length))
xWMACMO = wma(nRes, LengthWMA)
plot(nRes, color=blue, title="CMO")
plot(xWMACMO, color=red, title="WMA")
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