Momentum Detecting MT4 Indicator – Free MT4 Indicator

Momentum Detecting MT4 indicator is a versatile Forex indicator which measures the current momentum value, the previous momentum value and the momentum on the prior session. Using the values, the momentum detecting indicator shows whether the momentum is increasing or decreasing. Momentum Indicators are the powerful oscillators in technical trading and there are many such oscillators such as Stochastics or relative strength index. The MT4 also has a standard momentum indicator with the oscillator provides good indication of rising and falling momentum.

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The Momentum Detecting MT4 Indicator, when applied to the chart simply plots the pip change on the current bar, previous bar and the momentum on the second last bar. Based on the pip change, the momentum indicator can show when the momentum is rising or falling.

Momentum Detecting Indicator Settings

The momentum detector indicator for MT4 has a few settings.

• Period_1
• Period_2
• PriceField
• MaMethod

Going by the above settings, the momentum detecting indicator is assumed to work based on a moving average crossover method. Therefore, the pip change and the rise or fall of momentum also considers the moving average crossover system as well.

It is up to the trader to set their values.

• The Period 1 is expected to be the longer period moving average
• The Period 2 is expected to be the shorter period moving average
• Price Field values can be selected between 1 and 4 (Open, High, Low, Close)
• MaMethod can be between 1 and 4 (SMA, EMA, LWMA, SMMA)

The chart below shows the momentum detecting indicator settings with a 50, 20 period EMA, applied to closing prices.

Momentum Detecting MT4 Indicator Strategy and Trading Rules

The Momentum Detecting MT4 Indicator is best used alongside moving averages. In the next chart below, a 50 and 20 period EMA has been applied to the chart (the same settings used in the momentum detecting indicator). A major drawback of the momentum detecting indicator is that you cannot visually back test the data. Therefore traders are required to apply caution when using the momentum detecting indicator.

How does the momentum detecting indicator works?

Although there are no details on the momentum detecting indicator, looking at the input values, the indicator compares the current pip changes to the previous and second last values on the session. When the pip change increases and when the moving averages are bullish (or bearish) the momentum detecting indicator shows whether momentum is rising or falling.

The chart below shows the momentum detecting indicator on a 15 minute chart. Visually the chart shows the candles where the range has been flat, indicating that momentum was decreasing (but the trend is still bullish). A few sessions later, we now see that momentum is starting to increase, indicating that the uptrend is likely to resume.

There are many uses on how to apply the momentum indicator and it is up to the trader to use this indicator to their existing strategies. Here are some ideas worth exploring, where we think the momentum indicator can be useful:

• Trading with a moving average crossover, buy the dips when momentum falls and then starts to increase, while at the same time the MA’s remain bullish (opposite for selling)
• Trading breakouts is another way to trade with the momentum detecting indicator. Simply plot a horizontal range and wait for the momentum to increase and trade in the direction of the breakout if validated by the momentum detecting indicator

Momentum Detecting MT4 Indicator – Recommended Time Frames

Technically speaking, you can use this MT4 indicator for all time frames. However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly. We recommend that you use higher time frames like the 4H for better consistency.

How to trade with Momentum Oscillator Video Tutorial

How to trade with Momentum Oscillator Video Tutorial

ZigZag MT4 System Indicator Download

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Leave us a comment below to let us know your thoughts on this indicator. If you like this indicator, you might like see other indicators that we have carefully selected that will help you in your trading journey.

And if you can, you really should invest in a proven MT4 Expert Advisor to help you generate some profit on full autopilot. We highly recommend this powerful MT4 Expert Advisor.

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