Visualizing Relative Momentum with Three Moving Averages

Summary

RedK Momentum Bars is a visual indicator for comparing short-term relative momentum with a longer-term baseline. It uses a fast moving average, a slightly slower signal average, and a much slower filter average. The distance between the fast and signal averages is plotted relative to the filter; bar colors indicate whether their relationship and momentum are rising or falling. The author describes the display as a way to inspect momentum changes, convergence and divergence with price, and possible choppy conditions.

The settings allow different moving average types, sources, lengths, and a delay on the signal average. The document gives a brief BTC_USDT futures configuration at three-minute bars, but provides no measured trading results or formal performance evaluation. It also describes alerts around crossings of the zero line, while noting that alerts can occur before a bar fully clears the filter and may therefore give false signals. The indicator is framed as a discretionary reading aid inspired loosely by an impulse system, not as validated evidence of a profitable trading rule.

Key ideas

• The indicator compares fast and slower moving averages against a longer-term baseline.
• Bar length represents the relative distance between the fast and signal averages.
• Color changes convey whether relative momentum is increasing or decreasing.
• The display can help identify momentum divergence and possible choppy price action.
• Zero-line alerts can signal a possible regime change but may trigger before confirmation.

Tags

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