Understanding the Stochastic Momentum Oscillator: A Trader's Guide

The Stochastic Momentum Oscillator (SMO), created by William Blau, is a powerful tool for traders looking to enhance their technical analysis. It's built upon the Stochastic Momentum Index, which you can learn more about in the insightful book Momentum, Direction, and Divergence: Applying the Latest Momentum Indicators for Technical Analysis.

Ensure that WilliamBlau.mqh is placed in terminal_data_folder\MQL5\Include\
Place Blau_SM_Stochastic.mq5 in terminal_data_folder\MQL5\Indicators\

Stochastic Momentum Oscillator

Calculation:

The Stochastic Momentum Oscillator is calculated using the following formulas:

SM_Stochastic(price,q,r,s,u) = SMI(price,q,r,s,u)
SignalLine(price,q,r,s,u,ul) = EMA(SM_Stochastic(price,q,r,s,u),ul)

Where:

SM_Stochastic() - Represents the Stochastic Momentum Index SMI(price,q,r,s,u);
SignalLine() - This is the Signal Line, which is an exponentially smoothed moving average applied to the Stochastic Momentum Index;
ul - This is the period for EMA smoothing of the Signal Line.

Input Parameters:

q - Period of Stochastic Momentum (default is q=5);
r - Period of the first EMA applied to Stochastic Momentum (default is r=20);
s - Period of the second EMA applied to the result of the first smoothing (default is s=5);
u - Period of the third EMA applied to the result of the second smoothing (default is u=3);

ul - Period of EMA smoothing of the Signal Line, applied to the Stochastic Momentum Index (default is ul=3);

AppliedPrice - This indicates the price type (default is AppliedPrice=PRICE_CLOSE).

Note:

q must be greater than 0;
r, s, and u must also be greater than 0. If r, s, or u equals 1, no smoothing is applied;
ul must be greater than 0. If ul equals 1, the Signal Line and Stochastic Momentum Index will be identical;
Minimum rates = (q - 1 + r + s + u + ul - 4 + 1).

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