75th-25th Percentile Momentum | QuantumResearch

Introducing QuantumResearch’s 75th-25th Percentile Momentum Indicator

The 75th-25th Percentile Momentum indicator is a cutting-edge tool that combines percentile rank analysis with ATR-based deviation to detect significant bullish and bearish momentum in the market. By analyzing price movements relative to the 75th and 25th percentiles of recent data, the indicator provides traders with clear and dynamic signals for long and short opportunities.

How It Works

1. Percentile Analysis:
   
   The 75th and 25th percentiles are calculated over a user-defined lookback period, representing the upper and lower thresholds for price action.
   
   
2. ATR-Based Adjustment:
   
   ATR (Average True Range) is used to account for market volatility, dynamically adjusting the thresholds with user-defined multipliers.
   
   
3. Signal Generation:
   
   Long Signal: Triggered when the price exceeds the 75th percentile plus the ATR-based adjustment (default multiplier: 1.3).
   
   Short Signal: Triggered when the price falls below the 25th percentile minus the ATR-based adjustment (default multiplier: 1.3).
   
   
4. Visual Representation
   
   The indicator offers a clear and customizable visual interface:
   
   Green Bars: Indicate a bullish trend, signaling a potential long opportunity when the price surpasses the adjusted 75th percentile.
   
   Red Bars: Indicate a bearish trend, signaling a potential short opportunity when the price drops below the adjusted 25th percentile.
   
   
5. Additional visuals include:
   
   A dynamically colored 54-period EMA line, representing trend direction:
   Green Line: Indicates a bullish trend.
   
   Red Line: Indicates a bearish trend.
   
   A filled area between the EMA line and the midpoint (HL2), offering enhanced trend visibility.
   
   
6. Customization & Parameters
   
   The 75th-25th Percentile Momentum indicator includes several adjustable parameters to suit different trading styles:
   
   Source: Defines the input price (default: close).
   
   Percentile Length: Default set to 25, determines the lookback period for percentile calculations.
   
   ATR Length: Default set to 14, adjusts the sensitivity of volatility measurement.
   Multiplier for 75th Percentile: Default set to 1.3, adjusts the threshold for long signals.
   
   Multiplier for 25th Percentile: Default set to 1.3, adjusts the threshold for short signals.
   
   Color Modes: Choose from eight visual themes to personalize the appearance of trend signals.
   
   
7. Trading Applications
   
   This indicator is versatile and can be applied across various markets and strategies:
   
   Momentum Trading: Highlights when price action demonstrates strong upward or downward momentum relative to recent percentiles.
   
   Volatility-Adaptive Strategies: By incorporating ATR-based thresholds, the indicator adjusts dynamically to market conditions.
   
   Reversal Detection: Identifies potential turning points when the price moves significantly beyond the 75th or 25th percentiles.
   
   
8. Final Note
   
   QuantumResearch’s 75th-25th Percentile Momentum indicator is a powerful tool for traders looking to capture momentum and trend opportunities in the market.
   
   Its combination of percentile analysis, volatility adjustment, and visual clarity offers a robust framework for making informed trading decisions. As with all indicators, it is recommended to backtest thoroughly and integrate this tool into a comprehensive trading strategy.