Stochasticmomentumindex — Indicators and Strategies

SMI Ergodic Indicator/Oscillator ▮ Introduction The Stochastic Momentum Index Ergodic Indicator (SMII) is a technical analysis tool designed to predict trend reversals in the price of an asset. It functions as a momentum oscillator, measuring the ratio of the smoothed price change to the smoothed absolute price change over a given number of previous periods. The Ergodic SMI is based on the True Strength Index (TSI) and integrates a signal line, which is an exponential moving average (EMA) of the SMI indicator itself. It provides a clearer picture of market trends than the traditional stochastic oscillator by incorporating the concept of "ergodicity", which helps remove market noise. On ther other hand, the Stochastic Momentum Index Ergodic Oscillator (SMIO) is a histogram that measures the difference between TSI and it's signal line. By default, in TradingView both SMII and SMIO are provided independently. Here in this script these two indicators are combined, providing a more comprehensive view of price direction and market strength. ▮ Motivation: why another indicator? The intrinsic value of this indicator lies in the fact that it allows fine adjustments in both calculation parameters, data source and visualization, features that are not present in the standard indicators or similar. Also, trend lines breakouts and divergences detector were added. ▮ What to look for When using the indicator, there are a few things to look out for. First, look at the SMI signal line. When the line crosses above -40, it is considered a buy signal, while the crossing below +40 is considered a sell signal. Also, pay attention to divergences between the SMI and the price. If price is rising but the SMI is showing negative divergence, it could indicate that momentum is waning and a reversal could be in the offing. Likewise, if price is falling but the SMI is showing positive divergence, this could indicate that momentum is building and a reversal could also be in the offing. Divergences can be considered in both indicator and/or histogram. Examples: ▮ Notes The indicator presented here offers both the "SMII" and the "SMIO", that is, the "Stochastic Momentum Index Ergodic Indicator" together with the "Stochastic Momentum Index Ergodic Oscillator" (histogram), as per the documentation described in reference links. So it is important to highlight the differences in relation to my other indicator, Stochastic Momentum Index (SMI) Refurbished . This last one is purely based on the **SMI**, which is implemented using smoothed ratio between the relative range and the high/low range. Although they may seem the same in some situations, the calculation is actually different. The TSI tends to be more responsive at the expense of being noisier, while the SMI tends to be smoother. Which of these two indicators is best depends on the situation, the context, and the analyst's personal preference. Please refer to reference links to more info. ▮ References SMI documentation SMII documentation SMIO documentation

SMI Ergodic Indicator/Oscillator of Money Flow Index ▮ Introduction The Stochastic Momentum Index Ergodic (SMII) indicator is a technical analysis tool designed to predict trend reversals in the price of an asset. It functions as a momentum oscillator, measuring the ratio of the smoothed price change to the smoothed absolute price change over a given number of previous periods. The Ergodic SMI is based on the True Strength Index (TSI) and integrates a signal line, which is an exponential moving average (EMA) of the SMI indicator itself. The Ergodic SMI oscillator provides a clearer picture of market trends than the traditional stochastic oscillator by incorporating the concept of 'ergodicity', which helps remove market noise. On ther other hand, MFI (Money Flow Index) is a technical analysis indicator used to measure the inflow of money into an asset and thus help identify buying and selling pressure in a given financial instrument. When these two indicators are combined, they can provide a more comprehensive view of price direction and market strength. ▮ Motivation: why another indicator? By combining SMII with MFI, we can gain even more insights into the market. One way to do this is to use the MFI as an input to the SMII, rather than just using price. This means we are measuring momentum based on buying and selling pressure rather than just price. Furthermore, there is the possibility of making several fine adjustments to both the calculation and visualization parameters that are not present in other indicators. ▮ What to look for When using the SMII MFI indicator, there are a few things to look out for. First, look at the SMII signal line. When the line crosses above -40, it is considered a buy signal, while the crossing below +40 is considered a sell signal. Also, pay attention to divergences between the SMII and the price. If price is rising but the SMII is showing negative divergence, it could indicate that momentum is waning and a reversal could be in the offing. Likewise, if price is falling but the SMII is showing positive divergence, this could indicate that momentum is building and a reversal could also be in the offing. Divergences can be considered in both indicator and/or histogram. Examples: ▮ Notes The indicator presented here offers both the 'SMII' and the 'SMIO', that is, the 'Stochastic Momentum Index Ergodic Indicator' together with the 'Stochastic Momentum Index Ergodic Oscillator' (histogram), as per the documentation described in reference links. So it is important to highlight the differences in relation to my other indicator, the 'Stochastic Momentum Index (SMI) of Money Flow Index (MFI)': This last one is purely based on the SMI , which is implemented using SMA smoothing for the relative range and the high/low range. Although they may seem the same in some situations, the calculation is actually different. The TSI tends to be more responsive at the expense of being noisier, while the SMI tends to be smoother. Which of these two indicators is best depends on the situation, the context, and the analyst's personal preference. Please refer to reference links to more info. ▮ References SMI documentation SMII documentation SMIO documentation MFI documentation

Stochastic Momentum Index (SMI) of Money Flow Index (MFI)"He who does not know how to make predictions and makes light of his opponents, underestimating his ability, will certainly be defeated by them." (Sun Tzu - The Art of War) ▮ Introduction The Stochastic Momentum Index (SMI) is a technical analysis indicator that uses the difference between the current closing price and the high or low price over a specific time period to measure price momentum. On the other hand, the Money Flow Index (MFI) is an indicator that uses volume and price to measure buying and selling pressure. When these two indicators are combined, they can provide a more comprehensive view of price direction and market strength. ▮ Improvements By combining SMI with MFI, we can gain even more insights into the market. One way to do this is to use the MFI as an input to the SMI, rather than just using price. This means we are measuring momentum based on buying and selling pressure rather than just price. Another way to improve this indicator is to adjust the periods to suit your specific trading needs. ▮ What to look When using the SMI MFI indicator, there are a few things to look out for. First, look at the SMI signal line. When the line crosses above -40, it is considered a buy signal, while the crossing below +40 is considered a sell signal. Also, pay attention to divergences between the SMI MFI and the price. If price is rising but the SMI MFI is showing negative divergence, it could indicate that momentum is waning and a reversal could be in the offing. Likewise, if price is falling but the SMI MFI is showing positive divergence, this could indicate that momentum is building and a reversal could also be in the offing. In the examples below, I show the use in conjunction with the price SMI, in which the MFI SMI helps to anticipate divergences: In summary, the SMI MFI is a useful indicator that can provide valuable insights into market direction and price strength. By adjusting the timeframes and paying attention to divergences and signal line crossovers, traders can use it as part of a broader trading strategy. However, remember that no indicator is a magic bullet and should always be used in conjunction with other analytics and indicators to make informed trading decisions.

CT Reverse Stochastic Momentum Index Introducing the Caretakers Reverse Stochastic Momentum Index . According to Investopedia : “The Stochastic Momentum Index (SMI) is a more refined version of the stochastic oscillator, employing a wider range of values and having a higher sensitivity to closing prices.” The SMI was developed by William Blau and introduced in 1993 in an attempt to provide a more reliable indicator, less subject to false swings. It calculates the distance of the current closing price as it relates to the median of the high/low range of price. The SMI has a normal range of values between +100 and -100. When the present closing price is higher than the median, or midpoint value of the high/low range, the resulting value is positive. When the current closing price is lower than that of the midpoint of the high/low range, the SMI has a negative value. I have reverse engineered the SMI formula to derive 2 functions. One function calculates the chart price at which the SMI will reach a particular SMI scale value. The second function calculates the chart price at which the SMI will crossover its signal line. I have employed those functions here to give the price level where the SMI will equal : Upper alert level ( default 40 ) Zero-Line Lower alert level ( default -40 ) Signal line The user can infer from these values that when closing prices cross the levels shown, the SMI will cross the indicated level or signal line. If the price value is less than zero the value will show "impossible". The advantage of knowing the exact prices that this will happen should give the user an additional edge and precision in risk management. These crossover levels are displayed via an optional infobox with choice of user selected info. There is an option to change the decimal places shown. For easy and intuitive reading of the indicator when …. SMI is above the signal line both the SMI and Signal line and the space between them is Green. SMI is below the signal line both the SMI and Signal line and the space between them is Red. SMI is above the Zeroline the space between them is Green. SMI is below the Zeroline the space between them is Red. Traditionally traders and analysts will consider: Positives values above 40 indicate a bullish trend Negative values below -40 indicate a bearish trend . Common traditional ways to derive signals from the SMI : When the SMI crosses above the zeroline, a buy signal is generated. When the SMI crosses below the zeroline, a sell signal is generated. When the SMI crosses below -40 and then moves back above it, a buy signal is generated. When the SMI crosses above +40 and then moves back below it, a sell signal is generated. When the SMI line crosses above the signal line. A signal to buy / take profit is generated When the SMI line crosses below the signal line. A signal to sell / take profit is generated. Traders also look for divergences between the SMI itself or the SMI histogram and price action. The SMI is often used in conjunction with the Chande Momentum Oscillator or R squared indicator to determine overall market trendiness where the SMI is used to determine the direction of the trend, and also with volume indicators to show if the momentum carries significant selling or buying pressure.

SMI Stochastic Momentum Index 2x set per Baiynd -Tom1trader Stochastic Momemtum Index - a true strength indix tsi with a moving average signal. This uses the built in with modifications per Anne-Marie Baiynds recommendations - she uses a SIMPLE MOVING AVERAGE for the signal (signal length at 4x the short length seems to work best to reflect actual price action support or resistance) Note: Default settings in this code have been updated to her most recent recommendations that I have seen. video is entitled "The Most Reliable Technical Indicator I Have Ever Used" Note: I have not discussed this with Ms . Baiynd this is my interpretation of the vids I have seen. Anne-Marie Baiynd also in talks / videos refers to the use of short / long of 4/20 and 6/40 and have combined both of them here This overlays both of them with their respective SMAs- a 4/20 lengths and a 6/40 lengths in darker colors and smallest linewidth. this gives a perspective on slightly higher time frame action. USAGE: Generally above and below the black dashed zero line is long or short KEYS: -Plot position relative to zero black, red overbought, green oversold and the gray lines at .25 -.25 Indicator action often more significant out side of the more "neutral" +.25/-.25 area and near or above/below the red/green dashed lines. -Steepness of slopes Slopes of smi plots relate directly to price action where steeper is more momentum. - -SMI blue relation to its simple moving average orange and the SMI longer dark blue with moving average purple. MAJOR FEATURE - The average acts as support or resistance to the SMI and the price unless breaking out. Price is often pausing or reversing iin finding primary/secondary support or resistance as well at those times. You Can See and anticipate Where Support or Resistance may be Encountered. (much unlike most indicators) My standard caveat -use at your own risk. Like anyone else I do not know what the next bar/candle is going to do and I place all of my trades with a management plan in place for the worst case scenario. That said enjoy your charting and trading. This was coded starting with the built-in indicator "SMI Ergontic Oscilator / Indicator". You do this by within the Pine Editor select "New" tab and choose the indicator that you want the code for. This populates the editor with the code for the built in indicator and you can modify it to suit your purposes and save it / publish it and etc. Thanks for following this and Keep Smiling!

Inverse Fisher Transform on SMI (Stochastic Momentum Index)Inverse Fisher Transform on SMI (Stochastic Momentum Index) About John EHLERS: From California, USA, John is a veteran trader. With 35 years trading experience he has seen it all. John has an engineering background that led to his technical approach to trading ignoring fundamental analysis (with one important exception). John strongly believes in cycles. He’d rather exit a trade when the cycle ends or a new one starts. He uses the MESA principle to make predictions about cycles in the market and trades one hundred percent automatically. In the show John reveals: • What is more appropriate than trading individual stocks • The one thing he relies upon in his approach to the market • The detail surrounding his unique trading style • What important thing underpins the market and gives every trader an edge About INVERSE FISHER TRANSFORM: The purpose of technical indicators is to help with your timing decisions to buy or sell. Hopefully, the signals are clear and unequivocal. However, more often than not your decision to pull the trigger is accompanied by crossing your fingers. Even if you have placed only a few trades you know the drill. In this article I will show you a way to make your oscillator-type indicators make clear black-or-white indication of the time to buy or sell. I will do this by using the Inverse Fisher Transform to alter the Probability Distribution Function (PDF) of your indicators. In the past12 I have noted that the PDF of price and indicators do not have a Gaussian, or Normal, probability distribution. A Gaussian PDF is the familiar bell-shaped curve where the long “tails” mean that wide deviations from the mean occur with relatively low probability. The Fisher Transform can be applied to almost any normalized data set to make the resulting PDF nearly Gaussian, with the result that the turning points are sharply peaked and easy to identify. The Fisher Transform is defined by the equation 1) Whereas the Fisher Transform is expansive, the Inverse Fisher Transform is compressive. The Inverse Fisher Transform is found by solving equation 1 for x in terms of y. The Inverse Fisher Transform is: 2) The transfer response of the Inverse Fisher Transform is shown in Figure 1. If the input falls between –0.5 and +0.5, the output is nearly the same as the input. For larger absolute values (say, larger than 2), the output is compressed to be no larger than unity. The result of using the Inverse Fisher Transform is that the output has a very high probability of being either +1 or –1. This bipolar probability distribution makes the Inverse Fisher Transform ideal for generating an indicator that provides clear buy and sell signals.