Multicolor Momentum - Extension - MetaTrader 5 Script | Forex Indicator Download - MT4/MT5 Resources

Denis Meyers, who invented polychromatic momentum, described it as:

Momentum is defined as the difference or percentage change between the current bar and the bar in some past lookback period. The main problem with using momentum-based indicators is that the optimal lookback period seems to change over time, causing losses in the currently chosen lookback period.

To avoid errors due to a single lookback period, we created an indicator that takes a weighted average of all important lookback periods that are tradable. We named this indicator polychromatic because poly means many and chromatic means color. Therefore, the multicolor momentum of this indicator is transformed into the sum of many momentums.

This multicolor momentum is a useful indicator regardless. However, like many "raw" momentum indicators, its usefulness is somewhat limited when used without any form of smoothing, as it can "overreact" to even small changes in some situations, making it difficult to use for signals.

This version uses double smoothed EMA for smoothing. DSEMA has been proven to produce very good smoothing results with almost no lag, therefore, combined with it, the Multicolor Momentum indicator becomes even more useful in terms of signals.

Attachment download

📎 polychromatic_momentum_-_extended.mq5 (9.69 KB)

Source: MQL5 #20465