The Chande Momentum Oscillator (CMO) indicator for MetaTrader 4 was developed by Tushar Chande and is deployed in measuring “pure momentum.”
The CMO_v1 indicator is quite similar to momentum indicators like the Relative Strength Index, Stochastic and Rate of Change, but its enhanced and exclusive features makes it a convenient tool in the trader’s arsenal.
The sole purpose for the CMO_v1 indicator is in being able to spot overbought and oversold conditions in the market.
The indicator is quite easy to interpret; with its readings held up in a band between -100 and +100, which makes its analysis quite similar to the Relative Strength Index.
As such reading above 50 are considered as being overbought, while values below -50 represents an oversold condition.
As we all know, oversold and overbought conditions tend to pave the way for price reversals, thereby generating entry signals.
There are situations in the market where traders tend to use the CMO_v1 indicator to confirm potential trends.
Traders tend to initiate positions when the CMO_v1 indicator has a high reading and exit such position(s) when the indicator moves below a particular threshold.
If a forex pair’s price action or another technical studies depicts trend, but the CMO_v1 indicator reveals a choppy or sideways market (when the CMO_v1 values range between -25 and 25), it is a signal depicting a lack of momentum.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (Length, Price), Colors, width & Style.
Time frames: 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: momentum oscillator, trend
How to install the Chande Momentum Oscillator custom indicator in Metatrader 4?
- Download the Chande Momentum Oscillator indicator to your computer.
- Open your Metatrader 4 platform.
- Open the data folder from the top menu.
- Open the MQL4 folder.
- Open the indicators folder.
- Paste the indicator file in this folder.
- Restart the trading platform.
- Open any trading chart.
- Attach the indicator to the chart.