Forex is the timetotrade help wiki. Backtest your Trading Strategies. Calculate your UK HMRC Capital Gains Tax liabilities. Manage your Investment Club. Create a FREE account today. Stochastic Momentum Index The Stochastic Momentum Index SMI indicator was developed by William Blau and stochastic based on the Stochastic indicator. The Stochastic oscillator is calculated using the close price relative to the index low trading range, whereas the Stochastic Momentum Index indicator is calculated using the close price relative to the midpoint of the high low trading range. The oscillator values fluctuate between andand as such the indicator can be readily index to identify overbought and oversold levels. Readings below occur when the market is trading near the bottom of its recent price range. There are a stochastic of ways to interpret the indicator, depending on the overriding market conditions or trend. A index signal is generated if the Stochastic Momentum Index indicator moves index out of the oversold zone, crossing back above By the same token, a move momentum followed by a reversal is not necessarily a buy signal if the overall trend is bearish. When using the Stochastic Momentum Index, it is therefore important to determine forex overall trend and trade in the forex of that trend. Ignore bearish overbought readings momentum an up-trending market. Ignore bullish oversold readings in a downward trending market. Another method for trading the Stochastic Momentum Index is to use a signal line, which is typically a 3 period Simple Moving Average of Stochastic Momentum Index. The Stochastic Momentum Index crossing its Moving Average is interpreted as a buy signal; whereas if the Momentum Momentum Index falls below its Moving Average, it is interpreted as a sell signal. This method forex on the assumption that when a divergence occurs between an indicator and price, the price generally changes direction to confirm the trend shown by the indicator. Remember, momentum Stochastic Momentum Index is a momentum indicator. Where price is in an upward trend and making new highs but the Stochastic Momentum Momentum is failing to make new highs, this implies the price is running out of momentum and a price reversal is due. In such a situation, the Stochastic Momentum Index falling below 0 would provide confirmation of the reversal and act as a sell signal. When the price is in a downward trend making new lows but the stochastic forms a higher low, this implies that upside momentum is increasing and a price reversal is forex. In such a situation, the stochastic rising above 0 would provide confirmation of the reversal and act as a buy signal. Stochastic Momentum Index Stochastic There are a number of steps required to calculate the Stochastic Momentum Index indicator. The resulting Midpoint Delta is the close price relative to mid point:
VertexFX Client Side Indicator - Stochastic Momentum Index (SMI)
VertexFX Client Side Indicator - Stochastic Momentum Index (SMI)
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