Chande Momentum Oscillator and Adaptive Discontinued Signal Lines
Summary
The Chande Momentum Oscillator (CMO) measures momentum by comparing the sum of recent gains with the sum of recent losses, then scaling the difference by total price movement over the period. The document identifies the indicator with Tushar Chande and his 1994 book, but does not provide a specific calculation period or a worked example.
It describes the common practice of interpreting CMO against fixed thresholds, typically plus or minus 50, and argues that static levels can be inflexible and lagging. The proposed variant replaces those fixed thresholds with “Discontinued Signal Lines” for trend identification. The text does not explain how these lines are calculated, how signals should be traded, or provide test results, so the modification is presented as an idea rather than a fully specified or validated strategy.
Key ideas
- CMO compares summed gains and losses and scales the difference by total price movement.
- The document associates the indicator with Tushar Chande and his 1994 book.
- Fixed thresholds, often plus or minus 50, are described as potentially inflexible and lagging.
- The proposed variant uses discontinued signal lines to identify trends.
- The source gives no formula for those lines or empirical evidence of their effectiveness.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.