OPEN-SOURCE SCRIPT
Updated Close Momentum (Area)
This indicator measures how today’s closing price compares to its own average over a user-defined lookback period (default: ~6 months). It helps you quickly see whether price is trading above or below its medium-term average in a single, easy-to-read pane.
Formula:
Momentum = Close ÷ Average Close (over N days)
• Momentum > 1 → Price is above its N-day average (bullish relative to medium-term mean).
• Momentum = 1 → Price equals its N-day average.
• Momentum < 1 → Price is below its N-day average (bearish relative to medium-term mean).
The result is plotted as a filled area anchored at the 1.0 line, making it easy tospot regimes where price is persistently strong (>1) or weak (<1).
Settings:
• Lookback days for average close – Number of bars used to calculate the average close.
• Default: 126 (≈ 6 months, assuming ~21 trading days/month).
• Adjust for shorter/longer horizons (e.g., 63 for ~3 months, 252 for ~1 year).
How traders can use it:
• Identify trend bias: sustained readings above 1 suggest an uptrend relative to the chosen period; below 1 suggests a downtrend.
• Spot mean-reversion setups: extremes far from 1 may indicate overextended moves.
• Combine with price action or other indicators to filter entries and confirm momentum shifts.
This is a simple, visual way to track medium-term price momentum without cluttering your main chart.
Formula:
Momentum = Close ÷ Average Close (over N days)
• Momentum > 1 → Price is above its N-day average (bullish relative to medium-term mean).
• Momentum = 1 → Price equals its N-day average.
• Momentum < 1 → Price is below its N-day average (bearish relative to medium-term mean).
The result is plotted as a filled area anchored at the 1.0 line, making it easy tospot regimes where price is persistently strong (>1) or weak (<1).
Settings:
• Lookback days for average close – Number of bars used to calculate the average close.
• Default: 126 (≈ 6 months, assuming ~21 trading days/month).
• Adjust for shorter/longer horizons (e.g., 63 for ~3 months, 252 for ~1 year).
How traders can use it:
• Identify trend bias: sustained readings above 1 suggest an uptrend relative to the chosen period; below 1 suggests a downtrend.
• Spot mean-reversion setups: extremes far from 1 may indicate overextended moves.
• Combine with price action or other indicators to filter entries and confirm momentum shifts.
This is a simple, visual way to track medium-term price momentum without cluttering your main chart.
Release Notes
• momentum itself is centered around 1.0, so plotting it with area style makes TradingView fill the space between 1 and the value.• By plotting delta = momentum - 1.0 , the baseline becomes 0, so the filled area is centered properly and no longer occupies the full band from 1 to 0.
Release Notes
changed the nameOpen-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Open-source script
In true TradingView spirit, the creator of this script has made it open-source, so that traders can review and verify its functionality. Kudos to the author! While you can use it for free, remember that republishing the code is subject to our House Rules.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.