Stockan Momentum Meter

Stockan Momentum Meter (SMM)
Advanced Momentum Acceleration Oscillator
Version: 1.0 | Category: Momentum Oscillator | Type: Open Source

Detailed Technical Specification
Key Features
Dual-Layer Momentum Calculation

Calculates momentum using double derivative of price (ROC of ROC)

First Layer: Standard Rate of Change (ROC)

Second Layer: Momentum of Momentum (ROC applied to first ROC)

Signal Smoothing System

EMA filtering of raw momentum values

Adaptive smoothing based on user-defined length

4-State Color Coding

Quadrant-based visualization system:

Strong Bullish (Green): Histogram > Threshold

Moderate Bullish (Blue): 0 < Histogram ≤ Threshold

Moderate Bearish (Orange): -Threshold ≤ Histogram < 0

Strong Bearish (Red): Histogram < -Threshold

Dynamic Threshold System

Adjustable baseline levels for sensitivity control

Symmetrical upper/lower boundaries

Detailed Working Mechanism
Calculation Pipeline
Raw Momentum (momo):

momo = ROC(ROC(close, length), length)

Measures acceleration/deceleration in price movements

Double derivation filters out noise while capturing momentum shifts

Smoothed Signal (ema_momo):

ema_momo = EMA(momo, length)

Creates reference line for momentum comparison

Reduces whipsaws in volatile markets

Histogram Value:

histogram = momo - ema_momo

Visualizes difference between raw and smoothed momentum

Positive values = accelerating momentum

Negative values = decelerating momentum

PARAMETER CONFIGURATION

Momentum Length (Default: 14)
Range: 1-100 | Controls historical window for momentum calculations

Base Line Threshold (Default: 0.0)
Range: 0-100 | Determines sensitivity for color changes

COLOR CODING SYSTEM

GREEN Signals:
Histogram value ABOVE threshold level = Strong bullish momentum

BLUE Signals:
Positive values BETWEEN 0 and threshold = Moderate bullish pressure

ORANGE Signals:
Negative values BETWEEN 0 and -threshold = Moderate bearish pressure

RED Signals:
Histogram value BELOW -threshold = Strong bearish momentum

Key Benefits for Traders
Early Reversal Detection
Identifies momentum exhaustion before price reversal occurs

Divergence Spotting
Clear visualization of:

Bullish divergence (Price ↓ + Histogram ↑)

Bearish divergence (Price ↑ + Histogram ↓)

Trend Strength Measurement
Histogram height indicates momentum intensity

Multi-Timeframe Compatibility
Works effectively on:

Scalping (1-15min)

Swing Trading (1H-4H)

Position Trading (Daily-Weekly)

Customizable Sensitivity
Adjust threshold levels for:

Day traders (higher threshold = fewer signals)

Long-term investors (lower threshold = more sensitivity)

Usage Scenarios
Bullish Signal
Green histogram crossing above threshold

Blue → Green color transition

Bearish Signal
Red histogram crossing below negative threshold

Orange → Red color transition

Confirmation Tool
Use with trend indicators (EMA, MACD):

Green histogram + Price above 200 EMA = Strong uptrend

Red histogram + Price below 200 EMA = Strong downtrend

KEY ADVANTAGES OVER POPULAR INDICATORS

Faster Signals vs RSI
Detects momentum shifts earlier through double ROC calculation

Clearer Visuals vs MACD
Four-color system replaces confusing line crossovers with instant visual cues

Better Filtering vs Stochastic
Dual-layer calculation reduces market noise more effectively

Custom Sensitivity
Adjustable threshold outperforms fixed settings in traditional oscillators

How to Use
Add to chart from TradingView Public Library

Default settings work for most timeframes

Adjust parameters based on:

Aggressive trading: Reduce length (10-12)

Conservative trading: Increase length (20-25)

Combine with:

Trendlines for breakout confirmation

Volume indicators for signal validation

Notes
Best Performance: Ranging markets with clear support/resistance

Risk Management: Use with stop-loss (2x ATR recommended)

Limitations: May give false signals during low-volume periods