Author: Andrey N. Bolkonsky
Candlestick Momentum Indicator (q-period Candlestick Momentum) by William Blau is described in the book “Momentum, Direction, and Divergence: Applying the Latest Momentum Indicators for Technical Analysis”.
- WilliamBlau.mqh must be placed in terminal_data_folder\MQL5\Include\
- Blau_CMtm.mq5 must be placed in terminal_data_folder\MQL5\Indicators\
Momentum is the difference between the current price (for example, closing price of the bar) and the previous price (several bars ago). Momentum can be applied to any timeframe and period.
According to William Blau, the Candlestick Momentum is defined as a change of the price over the fixed interval:
cmtm = close – open
- close – close price of the bar (candle);
- open – open price of the bar (candle).
Candlestick momentum can be plus or minus in the sense that an up momentum is positive when the close is greater than the open; the reverse is true when the open is greater than the close giving a negative value to the downward momentum.
The definintion of Candlestick Momentum can be extended:
- Candlestick Momentum can be applied to any timeframe;
- The applied price (closing price, open price) may vary.
The formula for calculation of Candlestick Momentum looks as follows:
cmtm(price1,price2,q) = price1 – price2[q-1]
- q – number of bars, used in calculation of Candlestick Momentum;
- price1 – close price;
- price2[q–1] – open price q bars ago.
The smoothed q-period Candlestick Momentum is calculated as follows:
CMtm(price1,price2,q,r,s,u) = EMA(EMA(EMA( cmtm(price1,price2,q) ,r),s),u)
- q – number of bars, used in calculation of q-period Candlestick Momentum;
- price1 – close price;
- price2 – open price q bars ago;
- cmtm(price1,price2,q)=price1-price2[q-1] – q-period Candlestcik Momentum;
- EMA(cmtm(price1,price2,q),r) – 1st smoothing – EMA (r), applied to q-period Candlestick Momentum;
- EMA(EMA(…,r),s) – 2nd smoothing – EMA(s), applied to result of the 1st smoothing;
- EMA(EMA(EMA(…,r),s),u) – 3rd smoothing – EMA(u), applied to result of the 2nd smoothing.
- q – period of Candlestick Momentum Indicator (by default q=1);
- r – period of the 1st EMA, applied to Candlestick Momentum (by default r=20);
- s – period of the 2nd EMA, applied to result of the 1st smoothing (by default s=5);
- u – period of the 3rd EMA, applied to result of the 2nd smoothing (by default u=3);
- AppliedPrice1 – price type (by default AppliedPrice=PRICE_CLOSE);
- AppliedPrice2 – price type (by default AppliedPrice=PRICE_OPEN).
- r>0, s>0, u>0. If r, s or u are equal to 1, the smoothing is not used;
- Min. rates =(q-1+r+s+u-3+1).
HOW TO INSTALL METATRADER INDICATORS ON MT5
Installing indicators on MT5 comes down to:
- Downloading the files (.ex5 and .mq5 formats)
- Placing them in the MT5 “Indicators” Data Folder
- Closing and re-starting your MT5 terminal
- Dragging you indicator from the Navigator to the Forex Chart
Downloading the indicator.
Download and prepare the MT5 indicator file(s) so they are ready to go on your computer. (Please note that some custom indicators will come in a .rar file, so make sure to extract the .ex5 and .mq5 files).
Go back to your Metatrader 5 platform, click the File Tab and select “Open Data Folder” to get access to the system folders for the MT5 program:
Placing them in the MT5 “Indicators” Data Folder.
Go to the “MQL5” folder and the “Indicator” subfolder and open the folder.
Drag or copy and paste the custom indicators files to the “Indicators” subfolder.
Restart the MT5 program. When MT5 loads again, you should see your custom indicator added to the directory in the navigation window.
Go to the navigation window and scroll down the menu to “Indicators”, pick the one you want to use and drag it to your chart.
For a video on how to install you MT5 indicators please visit our Youtube channel.
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