Background:
As traders, we often find inspiration in various fields, and for me, the concept of "Linear Momentum" from physics struck a chord. I came across a thought-provoking article by Mr. Achmad Hidayat on his blog, titled "Konsep Momentum Linier dan Interpretrasinya pada Forex", which sparked my challenge to create a simple indicator based on his insights. However, I struggled to grasp his article fully, leading me to search for clearer explanations. Thankfully, I stumbled upon an excellent article by Mrs. Sarah Friedl at Study.com that clarified the concept beautifully.
What is Linear Momentum?
In my own words, momentum is essentially the force behind an object in motion. It’s calculated using the formula: momentum = mass x velocity. You probably already know that velocity refers to speed in a specific direction. So, the streamlined equation is: p = mv, where p represents momentum, m is mass (measured in kg), and v is velocity (in m/s).
Implementing Linear Momentum in MetaTrader:
Now, let’s delve into why we refer to it as Linear Momentum in the Forex world:
- p = momentum;
- m = mass, which we’ll convert into trade volume or tick volume; I personally prefer tick volume since it’s easier to access tick data than the overall volume of lots traded globally;
- v = velocity, calculated as the movement in pips divided by the timeframe (think of it as points per second, which originally is in m/s).
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