SFG - AMI indicator
Introducing the AI Momentum Index, a cutting-edge tool designed for savvy traders. Utilizing K-Nearest Neighbors (KNN) prediction, this advanced index offers insights without the lag often associated with traditional MACD methods. With our unique volume calculation feature, you'll be equipped to make informed decisions and capitalize on market movements like never before. Introducing the AI Momentum Index, a groundbreaking tool designed for traders seeking an edge in the market. Utilizing KNN prediction methods and a No LAG version of MACD, this index accurately reflects market trends while efficiently calculating volumes. With capabilities to identify overheat and cold areas, you'll be empowered to make informed trading decisions.
AI Momentum Index
Overview
• Name: “AI Momentum Index”
The AI Momentum Index [SFG] is a powerful indicator designed to predict momentum trends in financial markets. Leveraging a combination of traditional technical analysis methods and machine learning algorithms.
Key Components
Parameters' Rationale
1. Prediction Based on Machine Learning (k-NN Algorithm):
Utilizes the k-Nearest Neighbors method to make short-term predictions based on historical RSI and moving average values.
2. Trend Length Adjustment:
Control how quickly the indicator reacts to price movements using the Trend Length parameter, which determines the momentum calculation window.
3. Adaptive Signal Sensitivity:
The Prediction Data (k) parameter adjusts sensitivity by defining the number of “neighbors” considered in predictions.
4. Visual Indicators for Key Market Conditions:
• Overheated and Overcooled Zones: Highlights extreme momentum conditions.
• Gradient Fills: Visually enhances price channels for easier interpretation.
• Mid-Level Alerts: Detects transitions across neutral momentum levels.
5. Customizable Alerts:
Real-time alerts for conditions like overheating, overcooling, and key crossovers ensure that traders never miss significant signals.
Disclosure
Parameter Control:
• Prediction Data (k): Controls sensitivity by defining how many “neighbors” are considered.
• Smaller k: More responsive but sensitive to short-term fluctuations.
• Larger k: More stable but less responsive to sudden changes.
2. Momentum Detection Using Moving Averages & RSI:
• Combines Weighted Moving Averages (WMA) and smoothed RSI values to filter out short-term market noise.
• Crossovers between quick and slow moving averages help identify potential trend shifts.
3. Overheated and Overcooled Zones:
• When the AI Momentum Index exceeds ±70 levels, it signals extreme momentum conditions, indicating potential reversals or pullbacks.
License
License
This work is licensed under an Attribution-NonCommercial-ShareAlike 4.0 International License (CC BY-NC-SA 4.0).
For more details, visit: Creative Commons License.
© SFG