dynamic_momentum_index

Function Name: dynamic_momentum_index

Tags: Relative Strength Index

Category: Momentum, Volatility

An indicator used in technical analysis that determines overbought and oversold conditions of a particular asset. This indicator is very similar to the relative strength index (RSI). The main difference between the two is that the RSI uses a fixed number of time periods (usually 14), while the dynamic momentum index uses different time periods as volatility changes.

This indicator is interpreted in the same manner as the RSI where readings below 30 are deemed to be oversold and levels over 70 are deemed to be overbought. The number of time periods used in the dynamic momentum index decreases as volatility in the underlying asset increases, making this indicator more responsive to changing prices than the RSI.

 

Parameters:

StDevPeriod: Number of latest values of the security used for biased standard deviation calculation.

StDevSmoothingPeriod: Number of latest StDevPeriod values that are averaged.

RSIPeriodBase: Base number for calculation of the RSI period. This number is divided with StDev/AverageStDev ratio and then truncated to get RSI period value.

OverboughtLevel, OversoldLevel: Levels of displayed reference lines.

 

StDevPeriod
	Default Value: 5  |  Minimum: 1  |  Maximum: 999
	Type: Numeric
StDevSmoothingPeriod
	Default Value: 10  |  Minimum: 1  |  Maximum: 999
	Type: Numeric
RSIPeriodBase
	Default Value: 14  |  Minimum: 2  |  Maximum: 999
	Type: Numeric
OverboughtLevel
	Default Value: 70  |  Minimum: 0  |  Maximum: 100
	Type: Numeric
OversoldLevel
	Default Value: 30  |  Minimum: 0  |  Maximum: 100
	Type: Numeric