- If you've already decided you want to trade a symbol, this can identify points of momentum alignment.
- If a strong move has recently happened and you're looking for a change in momentum.
How it works:
This is a weighted combination of a and two modified SuperTrend (ATR Trailing Stop) indicators:
- The signal is based upon aligned momentum and is negated at the overbought and oversold points.
- The SuperTrend formula uses high and low values for calculation and both fast and slow can be adjusted for sensitivity.
Signals have to be useful to humans. If a signal occurs to late, you've missed it. The intent of this indicator is to assist in timing a trade at very short time-frames. It assumes your conviction about a trade already exists, but you are trying to get an optimal entry.
Opposing momentum (weak signal) within an uptrend can be a sign that you should wait before entering. The frequency of a signal can indicate the strength of the trend. As the frequency of the aligned signal value decreases so does the reward vs risk.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.