Buy Sell Signals are calculated with industry standard formulas to trend market volatility.
In order to measure the Momentum, you may set all signals based on your input of %K, %D, and Average True Range (ATR). The default setup is shown as above, you can change to any value.
These input %K, %D, ATR, and ATR Period options calculate momentum for BUY SELL Pro.
%K is the percentage of the price at closing (K) within the price range of the number of bars used in the look-back period. %D is a smoothed average of %K, to minimize whipsaws while remaining in the larger trend.
%K = SMA(100 * (Current Close - Lowest Low) / (Highest High - Lowest Low), 3)
%D = SMA(%K, %D)
Lowest Low = The lowest price within the number of recent bars in the look-back period (%K input)
Highest High = The highest price within the number of recent bars in the look-back period (%K input)
%K = 14, %D = 3 are commonly used for momentum calculation
BUY SELL Signals are generated when lines %K and %D are intersected. When %K crosses above %D, BUY signal appears. When the %K crosses below %D, SELL signal appears. If you put a small number as %D. you will see more SELL signals.
ATR Period usually uses the value of 14. The Average True Range is a moving average 14 days of the true ranges. The high ATR values are to find the market bottoms following a panic selling, low ATR values usually occur at the market Top Price level. As a default ATR is used with 2 in order to see more signals, if you want to avoid more signals, you can change to 12 ATR value.
Due to frequent intersections false signals could be generated which are Bull or Bear traps in short time frames. When BUY or SELL signal appears on the candle, wait until the candle is finished. Decide on the next set of candles to open your position.