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Creator : Definedge
D Momentum Pullback is a pullback dot indicator created by Definedge.
Trend, Volatility and Returns are important aspects of trend analysis.
There is a short-term and a long-term or medium-term trend. We can use moving averages to identify trends.
If the price moves above the moving average and the difference between the price and average is high, the disparity index is high. It shows strong momentum. To measure the distance, the average range volatility of the instrument is calculated. When the disparity comes down after strong momentum, there is an opportunity to enter with affordable stop-loss.
D Momentum Pullback measures bullish pullback and bearish pullback opportunities as per the above logic. It scores different aspects of the indicator. When the score is -4, there is a bullish pullback opportunity. When the score is 4, there is a bearish pullback opportunity.
When there is a bullish pullback opportunity, a green dot appears on the indicator. When there is a bearish pullback, a red dot appears on the indicator.
The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.
The indicator is applicable to all types of charting. It is calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin-Ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.
This indicator is available in the System Builder on RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.