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Hello and welcome to the Indicator Warehouse.
In today's video, I am going to be going over the Momentum
Multicolor Line and Bars.
The Momentum Multicolored Line and Bars indicator is a great
way to detect trend weakness, as well as reversal points.
Now, the standard momentum technical analysis indicator
measures the rate of change in closing prices, and it's used
to detect trend weakness and likely reversal points.
Now this indicator is often overlooked because of its
simplicity.
Our Momentum Multicolor Line and Bars measures the amount
that an instrument's price has changed over a given time
span, and it expresses it as a red and
green oscillating line.
Or you can actually use it as a paint bar tool.
I'll show you how to do that in just a few minutes.
There are several different ways you can use the Momentum
Multicolor Line and Bars indicator.
One of the things I'd like to point out-- one of its great
uses-- is you can use the Momentum Multicolor Line and
Bars indicator as a leading indicator.
Now this method assumes that the market tops are typically
identified by a rapid price increase, basically when
everybody expects price to go lower or higher, and then the
market bottoms typically end with a rapid price decline, or
basically when everybody wants to get out.
Let's go ahead, and let's take a quick look at that.
Of course, it's very clear to see that we're definitely in a
downward direction right here in regarding price movement
here with the oil market.
If we notice down here, look at where the Momentum
Multicolor oscillator bottoms out.
What we're actually seeing is, we're starting to see the
downward price movement weaken right here, as the Momentum
Multicolor line starts to bottom out and turn.
Another handy feature of the Momentum
Multicolor line is this--
I like to use it as a trending indicator.
And simply put, if my oscillator is above the zero
line, I'm looking for long trades.
And if my oscillator is red and below the zero line, then
I'm looking to take short trades.
It's a great indicator to use if you're a trend trader.
Now as I mentioned, you can also color the bars, which is
one of the great features about this indicator as well.
So not only can you see the color down here on your
oscillator, but if you come in here to your indicators and
color the bars--
change that to True, click Apply--
now it clearly tells you without even looking at the
oscillator exactly what the trend is.
Like I was saying, it's a great leading indicator, as
far as measuring the instrument's rate of change.
Theoretically what we've got right here is where price
actually does start to change, and then we do see that
eventually price rises and we move into an up trend.
So the Momentum Multicolor line actually gave us the
heads-up back here that we might want to start thinking
that, well, perhaps there's going to be a change in market
direction, which we're seeing right here.
Currently we see price starting to drop off here on
the oil market.
So we can take a look at this as well.
We can see where price, it's kind of started to slough off
here just a little bit.
We can see back here with the Momentum Multicolor oscillator
that price pretty much peaked out right here.
And, like I said, it gives us a heads-up.
Now granted, price still continued to rise, but it did
give us an early warning back here that perhaps price will
be weakening.
Now before I close this video out, there's one thing in
particular that I would like to point out.
This indicator has a sophisticated plotting method
that eliminates the typical mispaint problem associated
with the standard multicolor lines.
The plotting of trend changes are guaranteed accurate
regardless of what CalculateOnBarClose is set to.
So regardless if it's true or false, there is no repainting
on this indicator.
Well, all right, I hope you enjoyed this video and found
it to be informative.
If you have any questions whatsoever, please feel free
to contact any of the team members here at
the Indicator Warehouse.
Thanks and have a great day.