Description
The Stochastic Momentum Index (SMI) is similar to Stochastic Oscillator with the difference that it finds position of the Close price relative to the High-Low range's midpoint, not the range itself. This difference results in the oscillator being plotted on the -100 to +100 scale.
It is considered a Buy signal when the SMI crosses above the oversold (-40) level; Sell signal, when it crosses below the overbought (+40) level. The primary plot is accompanied with its Exponential Moving Average so that additional signals are produced. Crossing above the EMA suggests the Buy signal; crossing below, Sell signal.
Input Parameters
| Parameter | Description |
|---|---|
over bought
|
The overbought level. |
over sold
|
The oversold level. |
percent d length
|
The number of bars used to smooth the SMI. |
percent k length
|
The number of bars used to calculate the SMI. |
Plots
| Plot | Description |
|---|---|
SMI
|
The Stochastic Momentum Index plot. |
AvgSMI
|
The EMA of the Stochastic Momentum Index plot. |
overbought
|
The overbought level. |
oversold
|
The oversold level. |
Example*
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.