Understanding the Momentum In Time Indicator for MetaTrader 5

Author: LeMan

Let’s dive into the Momentum In Time indicator, a powerful tool for traders using MetaTrader 5. To really get a grasp on how to leverage this indicator effectively, we can take some insights from Larry Williams’ book, Long-Term Secrets of Short-Term Trading.

Williams explains the concept of range, which refers to the distance a price moves over a specific period—be it a day, week, month, or even a single second. Think of range as the total movement of a price in any timeframe you’re analyzing.

Just like clockwork, after periods of small ranges, we often see larger ranges emerge, and vice versa. This rhythm is the key to executing profitable short-term trades.

There’s no need for guesswork here; the market sends clear signals through its price movements. Profitability often comes from recognizing these signals that arise from larger ranges, which are predated by smaller ones.

Now, let’s talk about what happens on days characterized by big ranges. Typically, in days with upward large ranges, prices open near the day’s low and close near the high. Conversely, on days with downward large ranges, they tend to open near the day’s high and close near the low.

This means you should keep two critical factors in mind when trading:

• If you anticipate a big upward range for the day, don’t look for buy opportunities below the opening price. Generally, during big up days, prices tend to stay above the opening price.
• If you think you’ve caught a big downward move, be cautious. If prices drop significantly below the opening price, the chance of a substantial upward movement diminishes.

Understanding these principles is crucial for mastering short-term trading. Don’t overlook them!

This indicator was initially developed in MQL4 and published on CodeBase in mql4.com on April 26, 2010.

Fig.1 The Momentum In Time Indicator.