MOMO Vector - An innovative new indicator with powerful insights

We are always on the hunt for that indicator that gives us a true edge and simplifies our efforts to uncover stocks with momentum - and we think MOMO Vector indicator may be it.

Over the past few years we've been honing our efforts to find solid indicators of momentum with fewer false positives and happy to say MOMO Vector is genuinely one of a kind.

A Window into Trading Behavior

MOMO Vector provides unique insights into a stock's dynamics by combining both volume and price acceptance. Unlike other momentum indicators that focus solely on price movement - even our Momentum indicator, MOMO Vector reveals both the intensity and conviction behind the move.

Fundamentally, MOMO Vector has its roots in VWAP and measures the rate of change in volume-weighted price, naturally filtering out noise from smaller trades while amplifying the impact of larger ones.  The volume-weighting creates a cleaner momentum signal compared to raw price action, as significant price moves must be validated by substantial trading volume to generate steep changes.  Make sense?  In other words a few 100 share trades superficially moving a stock due to low liquidity are discounted naturally as its impact to volume-weighted price would be small. The results are an incredibly powerful and responsive indicator.

Inherently, MOMO Vector also offers valuable insight into trader behavior. A sharply positive value indicates buyers not only increasing their volume but also accepting progressively higher prices. This dual confirmation - higher volume at higher prices - states stronger conviction than either factor alone. Buyers in this situation are showing urgency, taking trades at ask rather than patiently working bids.

Similarly, a steep negative MOMO Vector value reveals sellers hitting bids with size, prioritizing immediate execution over price improvement. This combination of increased selling volume and acceptance of lower prices indicates urgency to exit positions. The steeper the negative slope, the more aggressively sellers are abandoning previous price levels. I think we all can relate here.

Time frames are important in using MOMO Vector. Rapid Vector changes in shorter intervals (1 to 15 minutes) will be used to indicate temporary positioning squeezes or news-based catalysts.

Longer-term use of MOMO Vector (hourly or daily) will highlight more sustained changes in trading accumulation and price acceptance levels. A flat Vector (roughly -.50 to +.50) will show passive trading conditions - where traders are working orders carefully and patiently waiting for prices without urgent execution needs.

When using MOMO Vector pay attention to market context in your analysis. In trending markets, consistent slope direction might indicate steady accumulation or distribution as traders accept directional price movement. During consolidation or breakouts, Vector changes help distinguish between temporary squeezes and genuine shifts in price acceptance levels. The indicator's behavior around key technical levels or during news events can reveal the conviction behind price moves.  As I mentioned above, you may see price tick higher on thin volume, but Vector becoming flat - reverting back to zero. This is the time to consider exiting your position.

This combination of volume, price acceptance, and time sensitivity make MOMO Vector a very unique and capable indicator.  It provides a window into urgency and conviction as well as helping show the difference between passive positioning and aggressive FOMO.

How to use MOMO Vector

First off you need to have MOMO Pro+.  All our proprietary indicators are only available in Pro+. 

Once you have that settled, you can access Vector in Discovery (our analytics engine and screener).  To do so, go to add a new filter and select the column and choose Vector.

The valid range for Vector is from -10 (max bearish momentum) to +10 (max bullish  momentum). 

Vector Value      Interpretation

  ±8-10                   Extreme move for time frame

  ±5-8                     Strong move

  ±3-5                     Moderate move

  ±1-3                     Consistent move

   ±0-1                    Weak/minimal movement

Now each time frame should be calibrated to your trading style.  When I select a 15min time frame along with Vector I'm looking at the starting value in the most recent 15 min period  (e.g. 15, 30, 45, 60 min markers)  to current time point  to determine Vector strength.  The same goes for hourly and others.

Versus other indicators

We don't use too many other charting indicators in general. Whether we see it implied in the chart already or not, we think indicators clutter the screen and provide false insights. However as a screening filter, MOMO Vector differs from traditional indicators by incorporating both volume and price acceptance behavior.  Here are a few thoughts on how Vector compares to the top chart oscillators for comparison sake. 

RSI - Unlike RSI, which measures price momentum through gain/loss ratios regardless of volume, Vector requires meaningful trading activity to generate signals. RSI shows overbought/oversold conditions even during thin trading, while MOMO Vector reflects actual trading interest and conviction.

Stochastics - compares closing prices to high/low ranges, missing intraday trading behavior and volume context. MOMO Pro+ Vector reveals how aggressively traders are accepting price levels through market orders and size.

MACD - tracks moving average convergence/divergence to identify price trends, but lacks insight into trading behavior. It can signal momentum without volume confirmation, while MOMO Vector requires meaningful participation which plays well for traders wanting to sell into.

MOMO Vector is unique because of  its sensitivity to real market dynamics - combining volume, price acceptance, and urgency.  While oscillators track mathematical price relationships, Vector shows actual trading conviction.

Is MOMO Vector Guaranteed?

No indicator can guarantee results, and we won’t pretend otherwise.  MOMO Vector does provide a hardened indicator which reflects increasing trading volume with a willingness to pay higher prices and as such, is extremely useful. While the trend (or vector) is clear, the duration of the move and associated volatility of the trend remain generally uncertain.

What else?

We are very excited to see how everyone uses MOMO Vector. Our testing and analysis shows its much more accurate and indicative of a validated momentum move across all timeframes. Sure you can try and eyeball the relationship of volume and price movement on charts for a single stock - but now you can see the relative performance versus other stocks and use as a screen alone or refined further with our other filters.

MOMO Vector is available only in MOMO Pro+ for use in Discovery and Conditional alerts.

Don't have MOMO Pro+ yet? Get started here.