OPEN-SOURCE SCRIPT
RedK_Momentum-based Step MA (MoStep_MA)
Summary
==========
This script plots a "momentum based" stepping Moving Average of various types - the idea is to visualize price moves in levels (or steps) to reduce "chart noise" - avoid getting caught in sideway moves - and enable better trade entry and exit decision.
How does the MoStep_MA Work:
=============================
- we first choose a "base MA" of our preferred type: WMA, EMA, SMA and Hull MA are available - this base MA will be visible in light gray on the chart and can be completely hidden (although it is useful - see chart below)
- The steps are then created when a "momentum change" - expressed by a "relatively significant price move" - has been detected - either up or down
A "Significant price move" is defined as a price move that is relatively large compared to the "recent" average (absolute) price moves within a certain period
The "strength average" period can be adjusted - in terms of how the average is calculated (WMA, EMA, SMA), the number of bars (length) taken into consideration, as well as to include a "significance factor" of the price move relative to that average
using a significance factor of 1.5 is like saying: i want a new step only when the price move is 1.5 times the average price moves within the last (x) bars
the move has to be in the direction of the underlying MA trend - this is an additional condition i added, when i found that some moves will be significant but in the opposite direction and will cause a new step to be created - adding unnecessary "noise"
Default settings and other tweaks
===============================
By default, we use WMA for both the base MA and for calculating the average price change - other moving average types are available -
the significance factor is set to 1 by default.
feel free to experiment with other values and settings.
here's a chart with some additional notes - the significance factor here is set to 1.5 times the average price move.
- code is commented with further notes
- this indicator should not be used in isolation - as usual, it should be supported by other trend and momentum indicators to get proper confirmation of signals
==========
This script plots a "momentum based" stepping Moving Average of various types - the idea is to visualize price moves in levels (or steps) to reduce "chart noise" - avoid getting caught in sideway moves - and enable better trade entry and exit decision.
How does the MoStep_MA Work:
=============================
- we first choose a "base MA" of our preferred type: WMA, EMA, SMA and Hull MA are available - this base MA will be visible in light gray on the chart and can be completely hidden (although it is useful - see chart below)
- The steps are then created when a "momentum change" - expressed by a "relatively significant price move" - has been detected - either up or down
A "Significant price move" is defined as a price move that is relatively large compared to the "recent" average (absolute) price moves within a certain period
The "strength average" period can be adjusted - in terms of how the average is calculated (WMA, EMA, SMA), the number of bars (length) taken into consideration, as well as to include a "significance factor" of the price move relative to that average
using a significance factor of 1.5 is like saying: i want a new step only when the price move is 1.5 times the average price moves within the last (x) bars
the move has to be in the direction of the underlying MA trend - this is an additional condition i added, when i found that some moves will be significant but in the opposite direction and will cause a new step to be created - adding unnecessary "noise"
Default settings and other tweaks
===============================
By default, we use WMA for both the base MA and for calculating the average price change - other moving average types are available -
the significance factor is set to 1 by default.
feel free to experiment with other values and settings.
here's a chart with some additional notes - the significance factor here is set to 1.5 times the average price move.
- code is commented with further notes
- this indicator should not be used in isolation - as usual, it should be supported by other trend and momentum indicators to get proper confirmation of signals
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
For quick access on a chart, add this script to your favorites — learn more here.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.