Chande Momentum Oscillator (CMO) on Gold

What it shows

The CMO swings around zero beneath the candles. Above zero, the rises in the 9-candle window outweigh the falls; the further it runs toward +100 or -100, the more one-sided those candles were.

How Pravex works it out

1. Take each candle’s change from the one before: close now minus the previous close (or whichever source you pick).
2. Put the rises in one pile and the falls in another, the falls as positive numbers. A candle that closed flat adds nothing to either.
3. Add up each pile over the last 9 candles.
4. CMO = 100 × (sum of rises − sum of falls) ÷ (sum of rises + sum of falls).
5. Picture a window, not live gold: if the rises add up to 30 and the falls to 10, CMO is 100 × 20 ÷ 40 = +50.

Settings

Setting	Default	What changing it does
Length	9	How many candles go into each pile. A shorter length swings to the extremes more often; a longer one moves slowly and rarely reaches them.
Source	Close	The price whose changes are counted. Using (H + L)/2 counts the change in each candle’s midpoint, so a close that snapped to one end of the bar counts for less.

How traders read it

Readings past +50 or -50 are often taken as a stretched run in one direction. Pravex draws no lines there, so on gold you decide your own marks, and it pays to check how often your timeframe reaches them.

A cross of the zero line says the balance of the last 9 candles changed sides. On its own that is a weak signal, because one large candle can flip it.

Because rises and falls are summed without smoothing, the line jumps when a big candle enters or leaves the window. The sudden drop nine candles after a spike is that spike leaving the sum.

When it misleads

In a strong trend the CMO can sit near an extreme for a long time, so a high reading is not a reason to sell on its own. On quiet gold candles a few small moves decide the sign, and the line flips around zero with no real change in direction.

Questions and answers

Is the CMO just a quicker RSI?

Close, but not the same. Both compare rises with falls. RSI smooths each side and maps the result from 0 to 100. The CMO adds the raw rises and falls of the window and maps the difference from -100 to +100, so it reacts quicker and jumps more.

Is a CMO near zero a quiet market?

Not always. Zero only says the rises and falls of the last 9 candles were the same size. Gold could have swung twenty dollars each way and still read zero.

Why does the CMO drop sharply nine candles after a big move?

The window holds exactly 9 changes with no smoothing. When the big candle falls out of it, its whole weight leaves at once, so the line lurches even if the new candle is ordinary.

Related: Connors RSI, True Strength Index, Relative Volatility Index, Relative Strength Index, every indicator.