TMO

Notes:

These indicators and concepts are specifically designed for TradingView.com

Overview

The Triangular Momentum Oscillator (TMO) is a technical analysis tool that is used to measure momentum in the market.

How to Trade

Typically we use this for divergence however here are some steps to trade using the TMO:

1. Identify the trend: Determine the overall trend of the market using price action or other technical indicators.
2. Look for TMO crossovers: The TMO generates buy or sell signals when the indicator line crosses above or below the zero line. When the TMO line crosses above the zero line, it is a buy signal, and when it crosses below the zero line, it is a sell signal.
3. Look for divergences between the TMO and the price chart. If the price is making higher highs, but the TMO is making lower highs, it could be a bearish divergence and a signal to sell. If the price is making lower lows, but the TMO is making higher lows, it could be a bullish divergence and a signal to buy.

How to Calculate

The Triangular Momentum Oscillator (TMO) is calculated using the following steps:

1. Calculate the rate of change (ROC) of the price series over a given period. The ROC is the difference between the current price and the price n periods ago, expressed as a percentage of the price n periods ago.
2. Smooth the ROC using a triangular moving average (TMA). The TMA is calculated by applying a weighted average to the ROC, where the weight of each value decreases as you move further away from the center of the period.
3. Calculate the difference between the current value of the TMA and the TMA n periods ago, expressed as a percentage of the TMA n periods ago.
4. Smooth the percentage difference using a second TMA. This second TMA is calculated in the same way as the first, using a weighted average to smooth the percentage difference.
5. The resulting value is the TMO, which oscillates above and below a zero line.