Understanding the Composite High-Low Momentum Indicator for MetaTrader 5

The Composite High-Low Momentum indicator is a powerful tool outlined by William Blau in his book, "Momentum, Direction, and Divergence: Applying the Latest Momentum Indicators for Technical Analysis". This indicator helps traders assess momentum trends in the market effectively.

Make sure to place WilliamBlau.mqh in your terminal_data_folder\MQL5\Include\
Place Blau_HLM.mq5 in your terminal_data_folder\MQL5\Indicators\

Composite High-Low Momentum Indicator by William Blau

Calculation:

To calculate the Composite High-Low Momentum, you can use the following formula:

HLM(q) = HMU(q) - LMD(q)

Where:

The smoothed version of the Composite High/Low Momentum can be calculated as follows:

HLM(q,r,s,u) = EMA(EMA(EMA( HLM(q) ,r),s),u) = EMA(EMA(EMA( HMU(q)-HMD(q) ,r),s),u)

In this case:

q - number of bars for calculating Up Trend Momentum and Down Trend Momentum;
HMU(q) - Up Trend Momentum (q bars);
LMD(q) - Down Trend Momentum (q bars);
HLM(q)=HMU(q)-LMD(q) - Composite High/Low Momentum;
EMA(HLM(q),r) - 1st smoothing - EMA(r) applied to the Composite High/Low Momentum;
EMA(EMA(...,r),s) - 2nd smoothing - EMA(s) applied to the result of the 1st smoothing;
EMA(EMA(EMA(...,r),s),u) - 3rd smoothing - EMA(u) applied to the result of the 2nd smoothing.

Input Parameters:

q - number of bars for HLM calculation (default is q=2);
r - period of the 1st EMA applied to HLM (default is r=20);
s - period of the 2nd EMA applied to the result of the 1st smoothing (default is s=5);
u - period of the 3rd EMA applied to the result of the 2nd smoothing (default is u=3).

Important Notes:

Ensure q>0;
Make sure that r>0, s>0, u>0. If any of r, s, or u equals 1, the smoothing is not applied;
The minimum rates must equal (q-1+r+s+u-3+1).

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