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In July 1996 Futures magazine, E. Marshall Wall introduces the Dynamic Momentum Oscillator (Dynamo). Please refer to this article for interpretation.
He describes the Dynamo Oscillator to be:
Dynamo = Mc - ( MAo - O )
where:
* Mc = the midpoint of the oscillator
* MAo = a moving average of the oscillator
* O = the oscillator
This concept can be applied to most any oscillator to improve its results.
For example, applying the Dynamo Oscillator to a 5-period %K slowed 3 periods Stochastic Oscillator would give:
50-(Mov(Stoch(5,3),21,S)-Stoch(5,3))
where:
* Mc = Stochastic Oscillator's midpoint = 50
* MAo = Moving average of the Stochastic = Mov(Stoch(5,3),21,S
* O = Stochastic Oscillator = Stoch(5,3)
This example applies it to an RSI oscillator:
50-(Mov(RSI(14),21,S)-RSI(14))
where:
* Mc = RSI's midpoint = 50
* MAo = Moving average of the RSI = Mov(RSI(14),21,S
* O= RSI Oscillator = RSI(14)
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