Twiggs Momentum
This is a nice oscillator for riding trends, get in when momentum rises sharply above zero and get out when it falls through zero.
Avoid buying when Twiggs momentum hits the overbought region. Overbought / oversold levels are normally taken as approximately the same as +/- the chosen number of days for the period. An overbought signal followed by divergence may be a sign that the trend is coming to an end.
The indicator is proprietary to which I am not privy, however this gives very similar results.
**I have been doing some backtesting since I published this and in fact the best results seem to be achieved when the overbought line is used as a buy indicator..funnily enough this is how Mr Twiggs recommends to use it. I guess you want to get that signal early in the stocks run however, not after a couple of years' solid advance as seen with AAPL above. I get good results on SP500 & ND100 stocks using a 50 day period (more correctly it should probably be called lookback) and a buy threshold around 40 to 60, selling when crossing below zero. YMMV, DYOR :)
Avoid buying when Twiggs momentum hits the overbought region. Overbought / oversold levels are normally taken as approximately the same as +/- the chosen number of days for the period. An overbought signal followed by divergence may be a sign that the trend is coming to an end.
The indicator is proprietary to which I am not privy, however this gives very similar results.
**I have been doing some backtesting since I published this and in fact the best results seem to be achieved when the overbought line is used as a buy indicator..funnily enough this is how Mr Twiggs recommends to use it. I guess you want to get that signal early in the stocks run however, not after a couple of years' solid advance as seen with AAPL above. I get good results on SP500 & ND100 stocks using a 50 day period (more correctly it should probably be called lookback) and a buy threshold around 40 to 60, selling when crossing below zero. YMMV, DYOR :)
study("Twiggs Momentum")
tperiod=input(title="Period",type=integer,defval=50,minval=2)
toverbought=input(title="Overbought",type=integer,defval=50,minval=1)
toversold=input(title="Oversold",type=integer,defval=-50,minval=-9999)
tlongperiod=2*tperiod
tma=ema(close,tlongperiod)
tmo=100*close/tma[tperiod]-100
h1=hline(toverbought,title='Overbought',color=gray,linestyle=dashed)
h2=hline(0,title='Neutral')
h3=hline(toversold,title='Oversold',color=gray,linestyle=dashed)
fill(h2,h1,color=green)
fill(h2,h3,color=red)
plot(tmo)