Momentum Theory

31 Jan

Momentum Theory is a mechanical pattern-recognition tool for rapid multi-timeframe analysis. It utilizes higher timeframe breakout levels and peak levels to quickly identify multi-timeframe Swing Points that help in setting a bias, formulating a setup, and executing an entry. It takes advantage of the fractal nature of the market by applying one concept for top-down analysis that scalpers, day traders, and swing traders can use.

✅ Rapid Multi-Timeframe Analysis
✅ Mechanical Pattern-Recognition Used to Filter Setups
✅ For Scalpers, Day Traders, and Swing Traders

--- 📷 INDICATOR GALLERY ---






--- ⚡ ANALYSIS FEATURES ---

✔ Multi-Timeframe Map
Displays breakout levels, peak levels, bar flow, and swing points of higher timeframes. Read how the market is moving with a quick glance.


✔ Bar Flow
Displays whether the previous higher timeframe bar closed in breakout, fakeout, inside, or outside. Aids to quickly read market flow.

There are 4 Bar Types: Breakout [BO], Fakeout [FO], Inside [IN], Outside [OUT]

✔ Momentum Cycles
Displays which part of the Momentum Cycle the timeframe is currently in to anticipate future movement.

Read more information below at Momentum Theory Concept

✔ Quick Analysis
Calculates a percentage bias based on the position of the higher timeframes to set an overall bias. Great for when trying to narrow down a large watchlist to a few pairs.


✔ Market Snapshots
Takes a snapshot of the entire market on all valid trigger bars for future review. Tracks Quick Analysis, Momentum Cycles, and Bar Flow at that exact point in time.

Limited to the last 150 entry bars. Use TradingView Bar Replay to access more history.

--- ⛰️ LEVELS FEATURES ---

✔ Breakout Bias
Shows the location of all the higher timeframe breakout levels and if price is currently bullish or bearish. Breakout bias shows the overall bias of the timeframe.


✔ Peak Bias
Shows which peak level has been triggered of the higher timeframe and if price closed above or below it. Peak bias shows the current momentum of the timeframe.


✔ Trigger Bars
Displays when the lower and middle timeframes are moving in alignment. Spot when the lower timeframes are starting to move together.

⚠️ Trigger bars are an indication of breakout bias alignment at the lowest timeframes. They are NOT signals to be taken blindly without further analysis.

✔ Automatic Range Detection
Detects if the current and higher timeframe is in a range and plots those levels on the chart.

Ranges are created when the following 3 bar scenarios occur:

1. Inside Bar - Peaks of current bar closed inside previous bar's peaks
   
2. Outside Bar - Peaks of current bar are outside previous bar's peaks, but closed inside.
   
3. Mirrored Fakeout Bars - 2 opposite facing fakeout bars in a row
   

✔ Key Levels Highlights
Highlights the relevant levels for each timeframe and if current price is above or below them.


✔ Visual Elements
Highlights key elements like breakout level flips, fakeout bars, intraday session trading times, off session times, and higher timeframe swing points.


--- 🔥 OTHER FEATURES ---

✔ Built-In Alerts
Multiple built-in alert types to notify you of significant events in the market.


✔ Dark and Light Modes
Adjustable theme colors to trade your chart the way you want.


✔ Plug-and-Play
Automatically changes the relevant levels depending on the viewed timeframe. No initial settings to configure. Just add it to your chart and start trading!

• H4 - Monthly Setups / Weekly Momentum
  
• H1 -Weekly Setups / Daily Momentum
  
• M15 - Daily Setups / H8 Momentum
  
• M5 -H8 Setups / H2 Momentum
  
• M3 - H4 Setups / H1 Momentum
  
• M1 - H1 Setups / M15 Momentum
  

--- 💡 MOMENTUM THEORY CONCEPT ---

The best trade setups are found at swing points for 3 reasons:

1. They are the highest probability point the market will continue pushing.
   
2. They provide the best Stop Loss protection.
   
3. They offer the greatest Risk-to-Reward.
   

The goal of trading is to identify when these swing points occur to take the best trade setups.



Every swing point consists of a push towards a peak, a peak formation, and a push away from a peak. There is no way to know how long a push towards or away from a peak will last, but the peak formation can be identified by 2 elements:

1. A fakeout of a previous peak level
   
2. A flip of its last breakout level
   

We can track the movement of the market by looking at which peak level is triggered relative to its breakout level. How price behaves at the previous peak levels shows where momentum is headed. It continues to build towards a new peak until it fakes out the previous peak level and flips its breakout level, creating a swing point.



Swing points on the higher timeframes show up as multiple swing points on the lower timeframes, but they often won't be moving in sync. When 2 timeframe swing points get in alignment, the market will move smoothly together. You find the lower timeframe swing point the exact same way you find the higher timeframe one.



The market is constantly moving from one swing point to the next in a repeatable cycle. By using higher timeframe breakout levels and peak levels triggered, we can track where we are in this cycle to anticipate its future movement. This is the Momentum Cycle and it repeats itself over and over.




By using the exact same concept, we can identify mechanical alignment patterns on the lower timeframes to create setups that work in every phase of the market cycle. Identify your own patterns or use the suggested ones below. Watch the Live Trading Examples to see how these patterns are used.

✔ Range Setups


✔ Continuation Setups


✔ Reversal Setups


--- 🧩 EXTENDING MOMENTUM THEORY ---

If the best trade setups are found at swing points, then that must mean that every trading strategy that's worth learning must have some type of method to identify that specific move. Since Momentum Theory specializes in identifying the swing point, it can easily fit into most trading strategies by removing discretion and inserting a mechanical process to filter your existing strategy's setups. By using only non-negotiable levels such as Previous Day High / Low, you can convert most discretionary patterns into mechanical ones to hopefully help increase your consistency. My hope is that you can build your own library of mechanical setups that are specific to your strategy that go beyond the ones that I've provided.



--- 📝 HOW TO USE ---

⚠ Click on "Indicators > Invite-Only > Momentum Theory" to add it to your charts.

1) Determine directional bias on the higher timeframe chart.


2) Identify the cycle and setup pattern on the middle timeframe chart and wait for the momentum timeframe to be triggered.


3) Execute entries when the lower timeframes are aligned. Market is fractal and you can pick whatever timeframe you want for entry. Trade as simple or complex as you want.

⚠️ Trigger bars are an indication of breakout bias alignment at the lowest timeframes. They are NOT signals to be taken blindly without further analysis.

--- 🎞️ LIVE TRADING EXAMPLES ---

Market Analysis with Momentum Theory [18:28]

Day Trading with Mechanical Setups (using Momentum Theory Scanner) [22:21]

Momentum Theory Scalping Concepts - Asia Session - GOLD [58:56]

8 Feb

Nota Keluaran

Alerts

• Fixed Alert Tooltips Typo
  
• Combined "Bias Reversal" and "Momentum Reversal" alerts into "Reversals"
  
• Added "Pullbacks" and "Reversals" to Presets List
  
• Removed "None" from Presets List
  

For Day Traders

• Changed M30 to Weekly Setups / Daily Momentum - and H2 Trend
  
• Changed M10 to Daily Setups / H4 Momentum
  

For Scalpers

• Added Breakout Level arrows for scalping timeframes
  
• Added Peak Bias color changes for scalping timeframes
  
• Removed triggers bars from scalping timeframes
  
• Updated Quick Analysis percentage to only calculate higher timeframes
  
• Changed 10s to M10 Setups / M2 Momentum
  
• Changed 15s to M15 Setups / M5 Momentum
  
• Changed 30s to M30 Setups / M10 Momentum