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 to 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

7. CCI (Commodity Channel Index)

Measures how far price is from its recent average, scaled by how much price normally moves. Despite the name, it works on any instrument, not only commodities.

• Above +100 = price is unusually high versus its average: strong upward momentum, or overbought
• Below −100 = unusually low: strong downward momentum, or oversold
• Most of the time CCI stays between −100 and +100; moves outside that band are the signals traders watch

Unlike RSI, CCI has no upper or lower limit, so extreme readings such as +250 are possible in strong trends.

Parameters:

Parameter	Default	Description
Period	20	Lookback window for the average and the deviation
Source	HLC3	The "typical price" (H + L + C) / 3 is the standard CCI input; other sources can be selected
Candle Type, Timeframe, Offset	—	Standard

How CCI is calculated

TP      = Source                     (default HLC3 = (H + L + C) / 3)
SMA_TP  = SMA(TP, Period)
MeanDev = average of |TP − SMA_TP| over the last Period candles
CCI     = (TP − SMA_TP) / (0.015 × MeanDev)

MeanDev is the mean absolute deviation, not the standard deviation. The 0.015 constant scales CCI so most values fall between −100 and +100.

Example strategy - CCI recovery from oversold:

	Condition
Entry	CCI(20) crosses above −100
Exit	CCI(20) crosses above 100

Type the thresholds as constants in the comparison: -100 and 100.