Got a great email from Mike:
"How does the Better Momentum indicator compare to Jurik's RSX … I'm not asking you to disrespect anyone in your answer, just an honest reply from being in the trenches as a trader would be appreciated."
Mark Jurik is a brilliant engineer and has done amazing work creating smooth, minimum lag indicators. I've bought a lot of his indicators and in fact I still use the Jurik Moving Average (JMA) to pre-process (smooth) data for the Better Sine Wave. You can check out his website here.
The RSX is Jurik's version of the popular RSI indicator – but smoother. He also has a momentum indicator called VEL. I've bought and tested both.
To answer the question, there are 2 differences between Jurik's RSX (and VEL) and the Better Momentum indicator:
- Better Momentum is based on volume and measures waves of buying and selling. RSX (and VEL) are based on price alone.
- Better Momentum is more "jagged" and not as smooth as RSX (and VEL). This does not bother me, as I'm trying to identify peaks in buying and selling for the divergence calculations – if I add smoothing it adds a delay to the divergence patterns showing up.
I hope that helps explain the major differences. I recorded a video too that compares these three momentum indicators: RSX, VEL and Better Momentum.
If you're reading this article via email or RSS reader, then follow this link to view the momentum indicator video on the website.
HIGH DEF VIDEO – MAY TAKE 15 SECONDS TO LOAD
Momentum Indicator Comparison – 18 November 2009 (11:28)
Just a note for Better Momentum indicator owners. In the video I have extreme buying and selling levels marked with large cyan dots. I'm experimenting with this feature and it may make it into the next version of Better Momentum.
Good luck with your trading.
