Chande Momentum Indicator in MT5 Download - Free - [TFlab]

When the oscillator approaches +100, it signals an overbought condition, indicating a potential price reversal or correction.

Conversely, a drop near -100 represents an oversold condition, which may present a buying opportunity and potential price growth.

Indicator Table

Overview of the Indicator

Unlike RSI or MACD, the Chande Momentum Oscillator analyzes price changes over specific periods rather than averaging prices. This unique approach provides traders with a clear view of price trends' speed and intensity, aiding in timely decision-making. As such, this indicator is a powerful tool for early detection of trends and changes.

Indicator in an Uptrend

In the AUD/USD currency pair chart on a 4-hour timeframe, the price approaches the oversold zone following a downward movement.

This scenario indicates reduced seller strength and increased buyer interest in entering the market. In such cases, the Chande Momentum Oscillator fluctuates between -50 and -100, signaling a potential price reversal to the upside.

Indicator in a Downtrend

In a downtrend, such as the GBP/USD currency pair, the Chande Momentum Oscillator reaches the higher range, indicating the overbought zone.

This suggests weakened buyer strength, increasing the likelihood of a price reversal to the downside. Traders can use this indicator alongside their strategies and confirmations to enterSell trades effectively.

Indicator Settings

• Chart Theme :Background settings for the indicator;
• Period: The number of candlesticks used in calculations (default: 14).

Conclusion

The Chande Momentum Oscillator indicator analyzes price changes over specific time periods and performs differently compared to indicators RSI and MACD. This indicator can be used across various timeframes, including daily and hourly timeframes, making it suitable for day trading.