Chande Momentum Oscillator & Connors RSI Indicator

by | Dec 6, 2020

Disclaimer: Posts on the HyperTrader blog and associated HyperLinq websites are for educational and informational purposes only. These posts should not be taken as financial advice, nor are they meant to be viewed as trading advice. HyperLinq Inc. or the authors take no responsibility for any damages or losses.

When trading crypto assets, it is crucial to recognize market conditions. Crypto traders will use several technical analysis tools at the same time to better understand market conditions. In this blog, we will discuss two technical indicators, the Chande Momentum Oscillator & Connors RSI Indicator, which help crypto traders make better trading decisions in markets like BTC & ETH.

Chande Momentum Oscillator

Tushar Chande created the Chande Momentum oscillator with the primary goal of supporting crypto traders to distinguish the direction of the market and whether the crypto market is in an overbought or oversold state by depicting the momentum of crypto assets. Since the Chande Momentum is an oscillator indicator, it is sanctioned to be comparable to the RSI. Like with any other oscillator indicator, the Chande Momentum oscillator additionally has an uncertainty point at zero ranging from negative one hundred to one hundred. Below you can find the calculation of CMO: 

Calculation

CMO=100x(Up-Down)/(Up+Down)

Up is the amount of favourable variations over a specified period (bar period)

Down is the amount of negative changes over a specified period (bar period.

Since the Chande Momentum is based on alteration, it mirrors the crypto market movements. Suppose the market is shifting downwards while the Chande Momentum curve is climbing upwards. In that case, the crypto market will modify and begin trending upwards in the corresponding path as the Chande Momentum. On the contrary, if the crypto market is going up while the Chande Momentum is drifting downwards, then the crypto market will convert and begin going down in the corresponding path as the Chande Momentum oscillator.

Connors RSI 

Chande Momentum & Connors RSI Indicator on HyperTrader

The Connors RSI is a technical indicator formed by Larry Connors. The Connors RSI is composed of three distinct elements, the Relative Strength Index, the Up/Down Length of the market, and the Rate of Change. These three elements operate together to generate a momentum oscillator used by crypto traders to make short-term trading choices.

Essentially, the Connors RSI can be a valuable trading tool for crypto traders that can use it to build intra-day trading strategies with a great chance of a successful trade. Trading flags are created based on trading indicator interpretations that occur within zero and one hundred values. If the Connor RSI reads beneath five recommends that the digital asset prices are in an oversold state, a buy signal; on the contrary, if the Connor RSI indicator is higher than ninety-five, it proposes that the digital asset prices are overbought, a sell signal. Overall, the Connors RSI is a valuable trading tool that crypto traders can use to assemble intra-day trading strategies with desirable risk/reward ratios and a high chance of a successful trade.

Try HyperTrader for free for 7 days – no credit card required. Download now

Head of Content Marketing @ HyperLinq. His love for Chai and mountains precedes everything. Often wonders about things like, "why $1 earned through leverage feels 100x better than $1 earned selling your time?"
Head of Content Marketing @ HyperLinq. His love for Chai and mountains precedes everything. Often wonders about things like, "why $1 earned through leverage feels 100x better than $1 earned selling your time?"

Blockchain Scaling Solutions Part 2: Sidechains

Understanding the working of sidechains such as Polygon or Liquid.

Introduction to Blockchain Scaling Solutions

To understand various scaling solutions for blockchain technology, we first need to delve into the need for scaling. Well, the need for scaling solutions for any technology emerges as the network grows rapidly with the influx of millions of new users. We’ve witnessed...

What are Automated Market Makers?

In our blog series on understanding decentralized exchanges, today, we’ll dig deeper into the concept of automated market makers i.e., the foundation of decentralized exchanges (DEXs). Automated market makers (AMMs) can be said to be one of the most important...

Understanding Dapps

Dapps are a critical step in building web 3.0. So today, let’s understand what are dapps.

Ethereum Token Standards: ERC-20 & ERC-721

Let’s delve into the Ethereum token standards ERC-20 & ERC-721 and find out how they work, and what they represent.

5 Use Cases of NFTs

Everyone has heard of NFTs at least once, but what are its real-world use-cases? We find out.

Understanding Yield Farming

Let us the concept of yield farming and how to earn a passive income using this technique.

What are NFTs?

When it comes to blockchain technology, NFTs have made the biggest buzz. So what exactly are NFTs and what makes them worth so much money?

The Bitcoin Ideology

Let’s talk about Bitcoin Ideology.

Top 5 DeFi Projects

Blockchain technology is pushing the boundaries of innovation across the spectrum from solving the trust, decentralized finance, programmable money to all the way towards art ownership. Today, we’ll talk about the DeFi and specifically, the top five DeFi projects....

Blockchain Scaling Solutions Part 2: Sidechains

Understanding the working of sidechains such as Polygon or Liquid.

Introduction to Blockchain Scaling Solutions

To understand various scaling solutions for blockchain technology, we first need to delve into the need for scaling. Well, the need for scaling solutions for any technology emerges as the network grows rapidly with the influx of millions of new users. We’ve witnessed...

What are Automated Market Makers?

In our blog series on understanding decentralized exchanges, today, we’ll dig deeper into the concept of automated market makers i.e., the foundation of decentralized exchanges (DEXs). Automated market makers (AMMs) can be said to be one of the most important...

Understanding Dapps

Dapps are a critical step in building web 3.0. So today, let’s understand what are dapps.

Ethereum Token Standards: ERC-20 & ERC-721

Let’s delve into the Ethereum token standards ERC-20 & ERC-721 and find out how they work, and what they represent.

5 Use Cases of NFTs

Everyone has heard of NFTs at least once, but what are its real-world use-cases? We find out.

Understanding Yield Farming

Let us the concept of yield farming and how to earn a passive income using this technique.

What are NFTs?

When it comes to blockchain technology, NFTs have made the biggest buzz. So what exactly are NFTs and what makes them worth so much money?

The Bitcoin Ideology

Let’s talk about Bitcoin Ideology.

Top 5 DeFi Projects

Blockchain technology is pushing the boundaries of innovation across the spectrum from solving the trust, decentralized finance, programmable money to all the way towards art ownership. Today, we’ll talk about the DeFi and specifically, the top five DeFi projects....
%d bloggers like this: