same chart. This indicator plots the absolute value of CMO.
The CMO is closely related to, yet unique from, other momentum oriented
indicators such as , , Rate-of-Change,
etc. It is most closely related to Welles Wilder?s , yet it differs
in several ways:
- It uses data for both up days and down days in the numerator, thereby
directly measuring momentum;
- The calculations are applied on unsmoothed data. Therefore, short-term
extreme movements in price are not hidden. Once calculated, smoothing
can be applied to the CMO, if desired;
- The scale is bounded between +100 and -100, thereby allowing you to clearly
see changes in net momentum using the 0 level. The bounded scale also allows
you to conveniently compare values across different securities.