Archived: TMO True Momentum Oscillator

[David45]

@David45 Let me say this again. Please load this 3 Grid Chart into ThinkorSwim and Observe. Watch if for a week.

Notice the difference between actual moves & counter trend moves. Please look at the indicator and the price chart and see what is happening.

If you need some assistance with reading charts, ask after you've done your due diligence.

Did you read all of the Tutorials that mention both TMO and RSI Laguerre? I have written on both in either the TMO or RSI Laguerre Threads.
Please use the search bar to find all instances.

I have written extensively on both topics in the Indicator and Tutorial Sections. If you have read them, please do it again.

There is even a video on the Slim Ribbon. Please find it and review it several times. The Ribbon is for Trend, the other 2 are similar for Momentum.

If your intention is to "mess" with Triple Levered ETF's, someone braver than I will have to tell you how they would go about trading them. Thanks.

Thanks Markos. Good advice. I'll be watching the 3 grid chart for a few weeks to try and gain a better understanding of how to use this indicator. I think part of why I am struggling a bit is because it seems as though most of the traders here are day traders, trade futures, or trade options. I do not trade intraday nor do I trade futures or options. I've been swing trading for about 10 years using various PCFs and East Scans I created using TeleChart. I was trading individual stocks and focused mainly on momentum breakouts using various parameters of trend intensity.

My day job and family commitments are now so demanding that I have very little time to devote to trading. So I have switched to an ETF based swing trading method to catch the major trends long and short on the Nasdaq 100. So basically 5 or 6 signals total from October 2018 to present. I'm not tied to using triple ETFs but they move more like stocks in terms of how much they move up and down.

Unfortunately, trend intensity does not work very well for trading ETFs. Since I already have a TDA account I thought I would try TOS. I have been trying various settings of the Detrended Price Oscillator, Ray Bear Power, and Qstick. Simply going long and short when they break above or below the zero mid line. But they all tend to get me into the trend a bit late on both the long and short side and are prone to false signals and whipsaws, especially using the shorter periods.

The True Momentum Oscillator seems like it might work a bit better for what I am trying to achieve. I read the tutorials but all I can conclude in terms of trying to keep things simple is to go short when it crosses below the +10 line and go long when it crosses above the -10 line. I have no idea what to do when it changes color in between these two signal lines. Like the other oscillators I have been trying, the TMO also seems prone to some false signals and whipsaws albeit to a lesser degree and it seems to get you into the trend earlier both long and short. I can easily see the difference between the actual moves and the counter trend moves. What I cannot see is how I would know the signal is false and not to take it. Getting in the trend early and avoiding false signals/whipsaws at all costs are my primary objectives. Maybe I will have an aha moment the more I look at it.

I really appreciate all of your help and insights. If there are any other indicators or oscillators that you think would also be useful for what I am trying to achieve I would love to hear about them. Horserider's Ultimate RSI looks very promising as well.

 

[markos]

@David45 Let me mark this up over the next few days and I'll post what I see on the chart that will better answer your specific questions.
I work a 60 hour week, have a family and am disabled to boot. I understand your situation. Give me some time to come up with something.
Besides watching this 3 Grid Chart, go to investopedia.com and read about how some indicators work.
Don't go off the trail though. Just read to gain point of view. This is the set-up I made for you. Down the road you can use the slim ribbons as I do.
For now this chart has nothing on it but the indicator to remove any distractions from the conversation.

 

[diazlaz]

Hi Markos, thanks for your guidance. You mention that you use the slim indicators in your trading, have you tried and paired up True Momentum Oscillator

 

[David45]

@David45 Let me mark this up over the next few days and I'll post what I see on the chart that will better answer your specific questions.
I work a 60 hour week, have a family and am disabled to boot. I understand your situation. Give me some time to come up with something.
Besides watching this 3 Grid Chart, go to investopedia.com and read about how some indicators work.
Don't go off the trail though. Just read to gain point of view. This is the set-up I made for you. Down the road you can use the slim ribbons as I do.
For now this chart has nothing on it but the indicator to remove any distractions from the conversation.

Thank you so much Markos! Wow your days are very busy like mine. I really appreciate all of your guidance in how to truly understand and best utilize this indicator.

 

[markos]

Hi Markos, thanks for your guidance. You mention that you use the slim indicators in your trading, have you tried and paired up True Momentum Oscillator

Yes, please read from the beginning of the Thread. I shared 2 charts with TMO and Slim Ribbon.

 

[Gator]

This one runs under my RSI Laguerre on a daily chart. Mobius recently put it on his trading chart.
Turn off after and before market hours. Delta of price is really only calculated during RTH. Unless you're trading futures, then if there's option trading, there's Delta of Price, as I understand it.
*It is traded at the polarity change signal, not the zero line. I love this indicator.

Hi, Thanks to everyone that posts in Usethinkscript. I have learned quite a bit as a new trader. I like the TMO and RSI Laguerre indicators for getting me into and out of trades. I added both to my TOS charts but I accidentally added them both into the same lower study. I’m glad it happened. Seeing both of them on top of each other gave me a better perspective as to how to use them in concert with each other. I’m experimenting with disabling the Gamma line in the Laguerre study especially since I haven’t learned enough about Gamma to help me in making trading decisions yet. Thanks again, @markos @BenTen @tenacity11 and everyone else.

 

[BenTen]

@Gator Glad to have you. Let us know how it goes

 

[HighBredCloud]

I haven't seen a TMO scanner when using the search function...so just incase someone is looking for one this is the best that I could find. Perhaps others here have updated scanners for it. I am just not sure about the SHORT scan for it...it seems off to me...as it does not work simply by commenting out the LONG scan...I would assume to make it work one would need to change from "plot Long = (Main crosses above signal) within 3 bar;" to "plot Long = (Main crosses below signal) within 3 bar; on the LONG scan.

# TMO_AlphaHisto

#

# AlphaHisto_JQ_v2018_08_21b

#       

 

 

input Correlation_Index = "SPY";

 

def close_index = close(Correlation_Index);

def RS = if close_index == 0 then 0 else close / close_index;

rec SR = CompoundValue("historical data" = RS, "visible data" = if IsNaN(SR[1]) then RS else SR[1]);

def SRatio =  SR;

 

def new_rs = (((RS / SRatio) - 1) * 100); #...... new_rs is the histogram bars

def delta_rs = (new_rs - new_rs[1]) / AbsValue(new_rs[1]);    #....  Changed formula to include absvalue on 2018-03-02

 

 

 

# TMO ((T)rue (M)omentum (O)scilator)

# Mobius

# V01.05.2018

#hint: TMO calculates momentum using the delta of price. Giving a much better picture of trend, tend reversals and divergence than momentum oscillators using price.

 

input length = 14;

input calcLength = 5;

input smoothLength = 3;

 

def o_TMO = new_rs[1];

def c_TMO = new_rs;

 

def data = fold i = 0 to length

with s

do s + (if c_TMO > GetValue(o_TMO, i)

then 1

else if c_TMO < GetValue(o_TMO, i)

then - 1

else 0);

def EMA5 = ExpAverage(data, calcLength);

def Main = ExpAverage(EMA5, smoothLength);

def Signal = ExpAverage(Main, smoothLength);

 

# Note Comment-Out (#) whichever scan not being used.

# Long Scan

 plot Long = (Main crosses above signal) within 3 bar;

# Short Scan

#plot Short = RSI crosses below .8 and gamma > .6;

 

# End Code TMO

 

[chewie76]

I use the 6,3,2 setting. I love it!!!!!!! Gives me great entries/exits when it is over 5 or under 5.

 

[markos]

@HighBredCloud You are correct. Replace the scan code with what I have below. Also delete everything that JQ put into the original code above the TMO information. JQ and I are on a quest for something else, so, his alphaHisto doesn't belong in this script for TMO purposes.
Thank you & HappyNewYear!

# Note Comment-Out (#) whichever scan not being used.

# Long Scan

plot Long = (Main crosses above signal) within 3 bar;

# Short Scan

#plot Short = (Main crosses below signal) within 3 bar;

 

[markos]

@tenacity11 Sorry that this got missed. Did you figure it out? I don't have the answer but someone else should.

 

[markos]

@chewie76 Could you let us know what time frame and type of security you trade?

 

[J007RMC]

Thanks for sharing the charts. I have to ask how to set up the one large colored background?

 

[tenacity11]

@tenacity11 Sorry that this got missed. Did you figure it out? I don't have the answer but someone else should.

Happy New Year Markos. No I haven't been able to figure it out yet. What I've been doing is scanning for main<-10 and then just waiting to see when it changes.

 

[markos]

Happy New Year Markos. No I haven't been able to figure it out yet. What I've been doing is scanning for main<-10 and then just waiting to see when it changes.

@tenacity11 If know one gets back to you by the weekend, please post a new question. I will look for something & hopefully get back to you before the weekend is over.

 

[markos]

@tomsk I trust vacation was good. Thank you for helping with @tenacity11 's question.
I have one for you. How do I set the scan up for polarity change within last three days as well as within the last 3 periods with all 3 periods past the crossing? Use another input? Thanks Markos

 

[tomsk]

@markos Be confident, from what I see from your various posts, you are gaining traction and getting right there. To gain further confidence, verify your scans on a lower plot of a chart when the signals are triggered. That's really the best way to learn how to do it.

 

[diazlaz]

TMO is showing great potential. 6,3,2 (thanks @chewie76) for short term holdings has possibilities.

any one has any other timeframes, experiences or recommendations for real short trading jump in

 

[horserider]

@diazlaz Darn TMO I am dumping it. Those oscillator swings from top to bottom are too extreme.

 

[markos]

@horserider If you're on a intra day timeframe, I would think it's tough. I never could invest that fast. I use the weekly and daily and let it go to +10 or - 10 as my tops & bottoms and yet I would still lean on price action first. The original scale was +20 / -20.
No problem moving on, as you've noted before, many indicators will tell you the same thing. I believe it's all in the lipstick.