Chande Momentum Oscillator (CMO)

The balance of up moves against down moves, from −100 (all down) to +100 (all up).

What it measures

CMO sums the gains and the losses of the last periods bars and compares the difference with the total. Unlike RSI it is not smoothed, so it reacts at once when a large move leaves the window. With signalPeriods, an exponential moving average of CMO is added.

How traders read it

Traders read above +50 as overbought and below −50 as oversold, and a cross of zero or of the signal line as a turn.

Formula

change = close − previous close
CMO = 100 × (sum of changes) / (sum of |changes|), over the last periods changes
signal = EMA(CMO, signalPeriods)

A window with no movement at all gives 0.

Settings and output

Call: cmo(periods, signalPeriods)

Setting	Chart default
`periods`: Periods	14
`signalPeriods`: Signal Periods	9

What you get: a list of 2, in this order: 1. a number; 2. a number (“cmo Signal”).

Warm-up: with cmo(14, 9), it asks for 0 bars of history and a run-up of 24, and its first value came on bar 23 of the example data.

Chart

Chande Momentum Oscillator (CMO) drawn by its own code on example prices

The prices are made up, hourly, and the same on every page, so the chart shows how the indicator behaves, not how a market behaved.

In an algorithm

function onIntervalClose() {
  const lines = cmo(14, 9);
  if (OPEN_POSITIONS_COUNT === 0 && lines[0] > lines[1] && lines[0] < -50) {
    openPosition("BUY", { quantity: 10000, stopLossPips: 25, takeProfitPips: 40 });
  }
}

Without signalPeriods, cmo(14) gives a single number.