MOMO Vector Deep Dive

MOMO -

MOMO Vector is our latest and most innovative trading algorithm, uniquely designed to deliver volume-validated momentum signals across all timeframes, from 1 minute to 1 month.

(If you stumbled across this before reading our initial MOMO Vector release post, please review it first as it will provide you with much needed context.)

How MOMO Vector Works

MOMO Vector calculates the slope between two points in time series data, which we normalize into a simple range from -10 to 10:

  • A value of 10 represents a 90° slope (straight up), particularly rare in longer timeframes.
  • A value of -10 indicates a -90° slope (straight down), often seen in sharp drops, like when Asian stocks announce a secondary offering after a rally.
  • A 45° slope translates to a 5 on the MOMO Vector scale.

This slope-based approach forms the foundation of MOMO Vector’s value.

Introducing MOMO Vector%

We’ve recently enhanced MOMO Vector with MOMO Vector%, which measures the rate of change in the Vector value. For example, a shift from a 45° slope (Vector = 5) to a 55° slope reflects a change you can now quantify. This allows you to answer questions like:

  • Which stocks have a 20% MOMO Vector% change in the past 15 minutes?
  • Which stocks show an 80% Vector% change over the last hour?

MOMO Vector% is now available as a filter in our Discovery tool, enabling powerful compound screening.

Discovery Filter showing Vector% as part of compound screen

MOMO Vector% Logic

In time series data, a slope can be determined between any two time points. This can casually be referred to as a trend, however, that is not the intention for bringing this up. The trend creates an angle from which we can then normalize across a numeric range. In our case, we created a range from -10 to 10 for simplicity. A value of 10 indicates the slope is 90° and straight up. As mentioned this is a rarity. A value of -10 is -90° or a move largely straight down.

When a stocks slope is at 45° for a given timeframe, the value MOMO Vector would display for is a 5. Easy enough, right? This is the basis of how the Vector value is determined.

Note: It's important to understand how the percentages are mapped to 180° of change. It is rather simple actually – from +90° to -90° represents 100% of available change. You can think of it as having 20 steps (-10 to +10), each having a 5° increment of which in total equal 100% (20 steps * 5°) of potential change. You can track change in increments smaller or larger than 5%, we just use that for simplifying the logic.

MOMO Vector and MOMO Vector% give traders the ability to quickly and easily identify stocks that are showing strong volume-validated momentum over a duration or rate of change. Together, giving powerful and unique screening insight unavailable anywhere except MOMO Pro+.

Don't forget to review our MOMO Vector introduction post, to see what makes MOMO Vector special.

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