Dynamic Trend Momentum
factor.formula
DTM (Upward Momentum):
DBM (Downward Momentum):
STM (Sum of Upward Momentum):
SBM (Sum of Downward Momentum):
ADTM (Dynamic Directional Trend Index):
ADTMMA (Dynamic Directional Moving Average):
in:
- :
Opening price of the day. Indicates the price level at the beginning of the trading day.
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Previous day's opening price. Indicates the price level at the beginning of the previous trading day, used as a basis for comparison.
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Highest price of the day. Indicates the highest price level reached during the trading day.
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Lowest price of the day. Indicates the lowest price level reached during the trading day.
- :
The upward momentum on the ith day, used to calculate the STM.
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Downward momentum on day i, used to calculate SBM.
- :
The length of the window for calculating the upward momentum sum (STM) and the downward momentum sum (SBM). The default value is 23, which means that the momentum data of the past 23 trading days is used for calculation. Smaller N values make the indicator more sensitive, while larger N values make the indicator smoother.
- :
The length of the window for calculating the Dynamic Directional Moving Average (ADTMMA). The default value is 8, which means that the ADTM data of the past 8 trading days is used for calculation. Smaller M values will make the ADTMMA more sensitive to changes in ADTM, while larger M values will make the ADTMMA smoother.
- :
Simple Moving Average. Calculates the moving average of ADTM.
factor.explanation
The Dynamic Directional Trend Index (DTM) measures the strength of market buying and selling forces by comparing the difference between the upward and downward fluctuations of the opening price, reflecting market sentiment and emotions. The calculation of this indicator takes into account the fluctuation of the opening price relative to the previous day's opening price, as well as the changes in the highest and lowest prices of the day, aiming to capture the change in momentum after the market opens. The ADTM value fluctuates between -1 and 1. The closer the value is to 1, the stronger the market buying force is, and the closer the value is to -1, the stronger the market selling force is. Below -0.5 is usually considered an oversold market, and above 0.5 is considered an overbought market. This indicator is often used in conjunction with its moving average (ADTMMA) to assist in determining trend reversal points. When ADTM crosses ADTMMA from bottom to top, it is usually considered a buy signal; conversely, when ADTM crosses ADTMMA from top to bottom, it is usually considered a sell signal. This indicator is suitable for short-term trading and can be used in conjunction with other technical indicators to improve the accuracy of the signal.