Download: dynamo.ela
File Includes:
Indicator - Dynamo Dynamic Momentum Oscillator)
Function - HighestSofar
Function - LowestSoFar
Category: Indicator > Oscillators
Description:
In July 1996 Futures magazine, E. Marshall Wall introduces the Dynamic Momentum Oscillator (Dynamo). Please refer to this article for interpretation.
The Dynamo oscillator is a normalizing function which adjusts the values of a standard oscillator for trendiness by taking the difference between the value of the oscillator and a moving average of the oscillator and then subtracting that value from the oscillator midpoint.
Dynamo Oscillator is calculated according:
Dynamo = Mc - ( MAo - O )
where:
Mc = the midpoint of the oscillator
MAo = a moving average of the oscillator
O = the oscillator
Usage:
This concept can be applied to most any oscillator to improve its results.
Example: Applying the Dynamo Oscillator to a 5-period %K slowed 3 periods Stochastic Oscillator would give:
50-(Mov(Stoch(5,3),21,S)-Stoch(5,3))
where:
Mc = Stochastic Oscillator's midpoint = 50
MAo = Moving average of the Stochastic = Mov(Stoch(5,3),21,S
O = Stochastic Oscillator = Stoch(5,3)
Inputs:
OscLen - number of bars to calculate an oscillator
MaLen - number of bars to calculate a moving average
LowBand - oversold line
HiBand - over bought line
EasyLanguage Code:
INPUTS : OSCLEN(10), MALEN(20), LOWBAND(23), HIBAND(77);
VAR: OSCVAL(0), MAVAL(0), MIDPNT(0);
OSCVAL = AVERAGE(FASTK(OSCLEN), OSCLEN);
MAVAL = AVERAGE(OSCVAL, MALEN);
MIDPNT = (LOWESTSOFAR(AVERAGE(FASTK(OSCLEN), OSCLEN)) + HIGHESTSOFAR(AVERAGE(FASTK(OSCLEN), OSCLEN))) / 2;
PLOT1(MIDPNT - (MAVAL - OSCVAL), "DYNAMO");
PLOT2(LOWBAND, "LOWBAND");
PLOT3(HIBAND,"HIBAND");