Momentum Indicators

Momentum indicators measure the speed and strength of price moves, and help spot overbought/oversold conditions and reversals. For the shared parameters (Candle Type, Source, Period, Timeframe, Offset), see Indicator Parameters Explained.

1. RSI (Relative Strength Index)

An oscillator between 0 and 100 measuring the speed and change of price movements.

• Above 70 — overbought; potential pullback
• Below 30 — oversold; potential bounce
• Divergence (price makes a new high but RSI doesn't) signals weakening momentum

Parameters:

Parameter	Default	Description
period	14	Shorter = more sensitive; longer = smoother
source	CLOSE	Standard
candle_type	OHLC	OHLC or HEIKIN_ASHI

Example strategy — RSI crossover (NIFTY, 5m):

	Condition
Entry	RSI(14) crosses above 30 — bearish momentum fading
Exit	RSI(14) crosses above 70 — market likely due a pullback

2. MACD (Moving Average Convergence Divergence)

A trend-following momentum indicator with three components:

• MACD Line — fast EMA (12) minus slow EMA (26): short-term momentum
• Signal Line — 9-period EMA of the MACD Line: the trigger line
• Histogram — MACD Line minus Signal Line: positive = bullish momentum, negative = bearish

Parameters:

Parameter	Default	Description
fast_period	12	Fast EMA period
slow_period	26	Slow EMA period
signal_period	9	Signal line EMA period
source	CLOSE	Price source
macd_component	MACD_LINE	Which output the condition uses: MACD_LINE, SIGNAL_LINE, or HISTOGRAM

Example strategy — MACD crossover:

	Condition
Entry	MACD Line crosses above Signal Line
Exit	MACD Line crosses below Signal Line

3. Stochastic Oscillator

Compares the current close to the recent high–low range, on a 0–100 scale. The idea: momentum shifts before price does.

• %K — the main line
• %D — moving average of %K (the signal line)
• Above 80 = overbought, below 20 = oversold

Parameters:

Parameter	Default	Description
k_period	14	Lookback for %K
d_period	3	Smoothing for %D
stochastic_line	—	Which line the condition uses: %K or %D

Example strategy — %K/%D crossover:

	Condition
Entry	%K crosses above %D (strongest when both are below 20)
Exit	%K crosses below %D (strongest when both are above 80)

4. ROC (Rate of Change)

The percentage change between the current price and the price N periods ago: ((Price − Price N ago) / Price N ago) × 100. Oscillates around a zero line — positive = bullish momentum, negative = bearish. A zero-line cross signals a potential trend change.

Parameters:

Parameter	Default	Description
period	14	Lookback period
source	CLOSE	Price source
candle_type	OHLC	OHLC or HEIKIN_ASHI

Example strategy — zero-line crossover (5m):

	Condition
Entry	ROC(14) crosses above 0 — momentum turns positive
Exit	ROC(14) crosses below 0 — momentum turns negative

5. Williams %R

A momentum oscillator on a negative scale from 0 to -100 (similar to Stochastic):

• -20 to 0 — overbought: price near the top of its recent range
• -80 to -100 — oversold: price near the bottom of its recent range

Parameters:

Parameter	Default	Description
period	14	Shorter (e.g., 7) = more signals; longer (e.g., 21) = fewer, more reliable
candle_type	OHLC	OHLC or HEIKIN_ASHI

Example strategy — mean reversion:

	Condition
Entry	Williams %R(14) crosses above -80 — leaving oversold territory
Exit	Williams %R(14) crosses below -20 — leaving overbought territory

6. Special K

Martin Pring's composite oscillator that sums multiple ROC calculations across short, intermediate, and long lookbacks, smoothed by moving averages. Designed to identify primary trend reversals while filtering short-term noise.

• Rising Special K = bullish momentum; falling = bearish
• Crossing its signal line generates buy/sell signals
• Divergence vs price is a strong reversal warning

Parameters:

Parameter	Description
special_k_component	SPECIAL_K (the main line) or SIGNAL_LINE (smoothed confirmation line)
source	Price source (Close is typical)
candle_type	OHLC or HEIKIN_ASHI
sig_len1	Primary lookback — lower = faster signals, higher = smoother
sig_len2	Secondary smoothing — higher = more stable, slower
timeframe / offset	Standard

Example strategy — Special K crossover:

	Condition
Entry	SPECIAL_K crosses above SIGNAL_LINE
Exit	SPECIAL_K crosses below SIGNAL_LINE