Relative Momentum Bars with a Three-Moving-Average Filter

Summary

RedK Momentum Bars visualize the relative position and direction of two faster moving averages against a slower baseline. The fast and slow averages are each compared with a filter average, and their resulting offsets form the plotted bars. Bar color reflects whether the fast line is above or below the delayed slow line and whether the fast offset is rising. The zero line therefore marks the baseline filter, giving the indicator a way to display both relative momentum and its location within a broader trend context.

The author describes uses similar to a centered oscillator: above-zero readings generally favor bullish conditions, while below-zero readings favor bearish conditions. Color changes can highlight momentum shifts, chop, and possible convergence or divergence with price. The script offers several moving-average types and includes alerts when the bar range crosses zero; its author cautions that alerts can fire early and produce false signals. This is an indicator for interpretation, not a tested trading strategy, and the description recommends confirmation and tuning to the instrument and timeframe.

Key ideas

• The indicator compares fast and slow moving averages relative to a slower baseline filter.
• Bar position around zero represents the fast and slow averages’ relationship to the filter.
• Bar color combines relative line position with the direction of change in the fast offset.
• Zero-line crossings can signal a possible shift in market mode but may produce false alerts.
• The indicator does not provide independently tested entry, exit, or risk-management rules.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.