Twiggs Money Flow: Wilder Smoothing, Breakouts, and Divergence
Summary
Twiggs Money Flow (TMF) is presented as a volume-based oscillator developed by Colin Twiggs. It compares Wilder-smoothed buying pressure with Wilder-smoothed volume over a configurable period. Buying pressure is derived from volume and the close’s position within a range that accounts for the previous close, connecting price location to trading activity.
The document interprets positive readings as bullish and negative readings as bearish, with distance from zero indicating signal strength. It suggests using TMF alongside support and resistance breaks and looking for bullish or bearish divergence between the oscillator and price. However, one short-entry rule says to enter when support breaks while TMF is above zero, which may conflict with the general bearish interpretation. No performance evidence or risk controls are provided, so these are indicator guidelines rather than a validated trading system.
Key ideas
- TMF divides Wilder-smoothed buying pressure by Wilder-smoothed volume.
- Its buying-pressure calculation uses the close’s location within a range that includes the previous close.
- Positive and negative readings are described as bullish and bearish, respectively.
- The document proposes combining TMF with support and resistance breaks or price divergence.
- The suggested short-entry condition may be inconsistent with the indicator’s stated bearish interpretation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.