Smoothed Chande Momentum Oscillator with Discontinued Signal Lines

Summary

The Chande Momentum Oscillator measures momentum by comparing the total gains and losses over a recent period with the total price movement. This variation replaces fixed threshold levels, commonly set at plus and minus fifty, with Discontinued Signal Lines to identify trends. It also smooths prices before calculating the oscillator, aiming to reduce noisy signals while limiting lag compared with smoothing the raw output.

The document explains the indicator’s design but gives no parameter settings, test results, or detailed rules for interpreting its signals. It says a smoothing period of one or less produces the raw oscillator. Traders should treat the claimed reduction in false signals as a design rationale rather than demonstrated evidence: the text supplies no backtest, comparison, or performance data, and the approach may behave differently across instruments and timeframes.

Key ideas

• The oscillator compares summed gains and losses with total price movement over a lookback period.
• This variation uses Discontinued Signal Lines instead of fixed thresholds to signal trends.
• Smoothing is applied to prices before the oscillator calculation to reduce signal noise while limiting lag.
• A smoothing period of one or less returns the raw Chande Momentum Oscillator.

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