CMO — Chande Momentum Oscillator
Overview
The Chande Momentum Oscillator calculates momentum using both up-day and down-day sums, oscillating between +100 and −100 to provide a symmetrical view of buying and selling pressure. CMO is particularly useful for identifying momentum extremes and divergences in forex and crypto markets. Pair it with the RSI for cross-confirmation, and explore other momentum tools in our indicator guide library.
How It Works
CMO = 100 × (Sum of Up-day closes − Sum of Down-day closes) / (Sum of Up-day closes + Sum of Down-day closes) over N periods. Unlike RSI which only divides by gains, CMO uses both sides symmetrically. Default period is 20. Values range from +100 (all closes up) to −100 (all closes down).
Key Signals
- CMO above +50 = strong bullish momentum.
- CMO below −50 = strong bearish momentum.
- CMO crossing zero = momentum direction shift.
- CMO divergence from price provides early reversal warnings.
Common Mistakes
- Treating +50 and −50 as rigid trade levels without considering the trend context.
- Comparing CMO directly to RSI — the scales and calculations differ significantly.
- Using CMO on very short lookback periods where it becomes overly volatile.
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