Chande’s Momentum Oscillator Indicator
Platform: MT4 Type: Oscillator Last update: September 23, 2024The Chande’s Momentum Oscillator Indicator is a custom forex oscillator that was originally developed by Tushar Chande. As the name suggests, it is a technical indicator that attempts to capture the market’s momentum. As it is with all oscillators, a trader takes advantage of provided overbought/oversold levels.
How to trade with the chandes momentum oscillator?
The range of the Chande’s Momentum Oscillator Indicator is from -100 to 100. The oversold level is considered when the indicator’s value drops below the -50 level, and conversely, it is considered overbought when it exceeds the 50 level. We think that it shouldn’t be used as a standalone trading tool, therefore in the examples below we use it in conjunction with 100-period Exponential Moving Average.
Buy Signal
Follow these steps for a long trade:
- General trend is bullish as price stays above the 100 EMA
- Chande’s Momentum Oscillator drops below the -50 level and reverse
- Price swings higher from recent low swing
- Buy trade is triggered after the above conditions are met
- Set stop loss a few pips below the last swing low of the market
- Take profit or exit whenever the Chande’s Momentum Oscillator indicator provides opposite signal or use your own method of trade exit
Sell Signal
Follow these steps for a short trade:
- General trend is bearish as price stays below the 100 EMA
- Chande’s Momentum Oscillator exceeds above the 50 level and reverse
- Price swings lower from recent high swing
- Sell trade is triggered after the above conditions are met
- Set stop loss a few pips above the last swing high of the market
- Take profit or exit whenever the Chande’s Momentum Oscillator indicator provides opposite signal or use your own method of trade exit
