Volatility momentum score
Sums volatility, momentum, volume and RSI into one score that tops out near 3.3; on this chart only RSI moves it.
The score adds four capped parts: volatility (the ATR ratio divided by 0.04, or 4%), momentum (the absolute 3-bar and 5-bar rate of change against 2% and 3%, each capped and averaged), volume (the volume ratio above 1, full at twice normal) and RSI (basic.RSI over its default 14 bars). The RSI part is zero for RSI from 0.3 to 0.7, equals RSI below 0.3, and equals 1 minus RSI above 0.7, so it can pull the score down.
How to read it
- The line sits in its own pane below the price.
- It sits flat at 3.0 while RSI is between 0.3 and 0.7.
- It dips below 3.0 when RSI is negative, reaching 2.0 at RSI -1.
- It rises above 3.0 when RSI is between 0 and 0.3 or above 0.7, peaking near 3.3.
What it outputs
- Volatility-momentum score
- Sum of the volatility, momentum, volume and RSI parts. On this chart it stays between 2.0 and 3.3, and only the RSI part moves it.
Pitfalls
- The chart feeds the close price into the ATR, ROC and volume inputs, so those three parts sit at their cap. A strategy that feeds real values gets different readings than this chart shows.
- The RSI thresholds of 0.3 and 0.7 only make sense for RSI from 0 to 1, but basic.RSI runs from -1 to +1. A negative RSI subtracts up to 1, and an RSI near +1 adds nothing.
- The source comments read above 2.0 as excellent and below 1.0 as poor. On this chart the score never falls below 2.0, so those bands do not apply here.