Chande Momentum Oscillator is a technical indicator that measures the speed and direction of change in the price of an asset.
How does the indicator work?
The indicator shows values from -100 to +100. In addition to these values, there are overbought zones (above the 50 level), oversold zones (below the 50 level), and zero level. Positive values indicate a fast upward market movement (bullish trend), while negative values indicate a fast downward market movement (bearish trend).
How to use in trading?
- If the indicator crosses the level 0 from bottom to top – it indicates the beginning of an upward trend and vice versa.
2. In cases when the indicator returns from overbought and oversold zones (-50 and 50) it is a signal for a reversal of the movement.
Note
The main peculiarity of the indicator is that it requires changing the settings when changing the asset and time interval.
