This study is an alternative experimental interpretation of the Blast Off Indicator by Larry Williams. This formula takes positive and negative magnitudes rather than the absolute value. The result is then smoothed with an EMA, and twice smoothed to provide a signal line.
Note di rilascio
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Updates:
Simple housekeeping. Cleaned up the code a bit.
Aesthetic Updates: -> Changed BOM's plot to columns -> Added bar colorization
Hi can you explain how blast off indicator works, what should I look for to take a trade, please me
ProPiper
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@sttyorrick, Inputs Periods (per): The primary look-back period for calculating the BOM, with a default value of 34. Signal Period (sigper): The period used for calculating the signal line, with a default of 9. Threshold Distance (tdist): Determines the distance from the zero line (center line) to set the upper and lower threshold lines, with a default of 10.
Core Calculation The indicator calculates the "Blast Off Momentum" (BOM) by taking the difference between the close and open prices (ocrng), and the high minus low price (hlrng) for each period. This ratio is multiplied by 100 and then smoothed using an EMA over the specified per period. A signal line (SIG) is then calculated as an EMA of the BOM over the sigper period.
Thresholds and Color Coding Upper (uth) and lower (lth) thresholds are set based on the tdist value. These thresholds help in identifying overbought or oversold conditions. The color of the BOM plot and bars changes based on its value relative to these thresholds, indicating different market conditions (e.g., green for mild positive momentum, maroon for mild negative, lime and red for more extreme positive or negative momentum, respectively, and orange when the BOM value does not meet any specific condition).
Plots The indicator plots the BOM values as columns (bomplot), the signal line, and three horizontal threshold lines (upper, center, and lower) on the chart. The color of the BOM columns and the background color of bars on the chart change according to the bomcolor logic based on the BOM value's relation to the thresholds. This indicator seems tailored for traders looking to gauge market momentum with a nuanced approach, including visual cues for quick interpretation of market conditions. The use of EMA smoothing helps in reducing noise and highlighting the underlying trend in price movements.