Twiggs Momentum Oscillator is a new proprietory indicator from incredible charts for indentifying trendy markets
Identifying Fast Trends
Fast-trends are indicated when Twiggs Momentum Oscillator (21-day):
Rises above 20%, indicating an up-trend; or
Falls below -20%, indicating a down-trend.
The indicator period can be adjusted to as low as 5 days, to identify short-term trends, or as high as 12 months, to identify extremely long-term trends (the super-cycle). The percentage gain or loss would have to be adjusted accordingly: to 10% or 100% respectively.
1)Go long when Twiggs Momentum Oscillator (21 days) rises above 20%, while price is above the 63-day exponential moving average
2)Increase long position when Twiggs Momentum Oscillator (21 days) reverses above 10% while price is above the 63-day exponential moving average. Signals can also be taken when Twiggs Momentum Oscillator reverses up by 5% when close to the moving average.
Buy and Sell Signals
The shorter-term oscillator can also be used to generate buy and sell signals in a similar fashion to other momentum oscillators.
First, identify the trend direction using a trend indicator. Twiggs Momentum Oscillator tends to stay above zero during an up-trend and below zero during a down-trend. Only take signals in the direction of the trend.
In an up-trend, go long if Twiggs Momentum Oscillator turns upwards when below zero.
In a down-trend, go short if Twiggs Momentum Oscillator turns downward when above zero.
Use trailing buy and sell stops to time your entry and exit. Take profits on divergences and trend line breaks. Exit using a trend indicator.
Trend lines can also be drawn on Twiggs Momentum Oscillator. A break in the trend line often occurs in advance of a similar break on the price chart.