Momentum deviation bands identify oversold overbought conditions in the asset price. It can be used to create mean reversion strategies as well as trend breakout strategies. A close above the upper band suggests a trend breakout. When price goes too far away from the upper band, it suggests an overbought situation and mean reversion strategies can be applied.
When the band width is relatively small and it suddenly expands, it suggests a new trend development. Trades should be confirmed with other non corelated indicators. For example, when a upward breakout is identified by the momentum deviation bands, look for confirmation with some volume based indicator.
Period - Number of bars to calculate the bands
Multiplier -A multiplication factor, similar to standard deviation in Bollinger bands
MomPeriod -Momentum calculation period
MomPrice -Price field for calculations, 1 Close, 2 Open, 3 High, 4 Low, 5 Median, 6 Typical, 7 Weighted