One of the tools from the famous trader John Carter (tools). This indicator gives you a glance overview of all the important metrics for momentum trading. We have been using these over the years and are considering them a star indicator. We have included various methodologies from reading many trading books. Some of the credits go to Dr . Van Tharp (featured in the first Market Wizards book by Jack Schwagger), John Carter from Simpler Trading and Mark Minervini.
WHAT IT DOES
The momentum labels give reading of different important momentum studies:
- Current price of the ticker selected
- SQN - defined by: "A measure of a market’s movement through an application of the System Quality Number calculation. To calculate, the daily changes from close to close measured in percentage terms are averaged and the standard deviation is calculated. Plugged into the SQN formula, those values and the number of days (N) provide the market SQN score." Fully customisable length for calculations. As per Dr . Tharps methodology.
- Squeeze Pro - wether the ticker has created a squeeze as per John Carters methodology.
- Average Directional Movement measure ( ADX )
- ADXc = Daily ADX change - please refer to my other indicator
- Beta - the measure of a stock's volatility in relation to the overall market. Customisable symbol to calculate beta against
- Up vs Down volume ratio, calculated on customisable period
- Correlation coefficient with customisable symbol over customisable length
- Price relation to high. The definition of high can be chosen between 52WK high (works only on Daily timeframe ) or ATH
- Wether the 8,21,34 MAs are stacked. Can customise for SMA or EMA
- The MTF VWAP . This label shows how are the HIGHER timeframe VWAPs relating to each other. /please note that this works only on higher timeframes to the current timeframe, e.g. if you have a daily chart , the VWAP calculations would only work on timeframes higher than 1 day). It calculates the VWAP on higher timeframes and then it assigns values depending on their relations
- Stacked+ = this means that VWAP on timeframe1 > WAP on timeframe2 > WAP on timeframe3 // color here is LIME
- Stacked = this means that VWAP on timeframe2 > WAP on timeframe3 // color here is GREEN
- x = this means that none of the above conditions are met // color here is RED
- Current VIX measure
HOW TO USE IT
The measures of the Momentum Labels are very important to assess the strength of the trend.
SQN (when using 100 as a lookback period):
- SB stands for SuperBullish trend