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Pattern Strategy: Mastering the Ivanovitch Momentum System (IMS)

The Ivanovitch Momentum System (IMS) is a powerful trading indicator designed to help you make better trading decisions by using price metrics, trends, and patterns. To fully harness the potential of the IMS indicator, proper configuration is key. This article will guide you through the different settings, ensuring you can adapt the indicator to your trading style and market preferences.

Getting Started: Activating the IMS Indicator

Once you’ve added the IMS indicator to your chart, you’ll need to access its configuration settings. To do this:

  1. Activate the Indicator: Once activated on your chart, a settings menu will pop up.
  2. Open the Settings: Click on the indicator icon, and you’ll be taken to the configuration page where all the customization options are located.

Basic Settings: Price Calculations

The first settings you’ll encounter are the price calculations. This defines how the IMS indicator will calculate the price metrics for each candle on your chart. There are several options for setting price calculations:

  • H: High (the highest price of the candle).
  • L: Low (the lowest price of the candle).
  • C: Close (the closing price of the candle).
  • O: Open (the opening price of the candle).
  • LH
  • OHLC
  • OC
  • Volume-based Calculations: You can also choose to calculate based on the volume or the moving average of volumes for additional insights into market movements.

These settings allow you to adjust how the indicator interprets the market, which is crucial for traders focusing on different price actions. Ivanovitch recommends starting with closing price calculations as the default, but you can experiment with different settings based on your trading strategy.

Average Calculation: Candle Periods

The next set of options focuses on how the IMS indicator calculates the average for candle periods. This is important for understanding the broader market trend over a specific time frame.

  • Period Length: You can set this to calculate based on the last 10 candles, last 3 candles, or any number of previous candles you prefer. The default is 10, as recommended by Ivanovitch.

This average calculation allows you to adjust how sensitive the indicator is to price changes. Shorter periods (e.g., 3 candles) make the indicator more reactive, while longer periods smooth out price movements for traders focused on long-term trends.

Trend Length and Indicators

Another important setting is the trend length, which is set to a period of 10 by default. However, this can be adjusted based on your market. The trend length helps the IMS indicator determine the strength and direction of market movements.

Available Indicators for Trend Calculation:

  1. Supertrend (default option).
  2. Moving Averages.
  3. Change of Character (CHoCH).
  4. Donchian Channels.

Each of these indicators provides a unique way to calculate trends, and you can customize their settings to match your trading style. For example, if you prefer smoother trends, use moving averages, while more dynamic traders might prefer Supertrend or Donchian Channels.

Customizing the Chart Display

Once the technical settings are in place, you can adjust the design of your chart for better visualization. The IMS indicator allows you to customize what information is displayed on your chart, helping you avoid clutter and focus only on the most relevant metrics.

  • Display Options: Decide which elements you want visible, such as support/resistance lines, signals, and specific patterns.
  • Pattern Selection: Ivanovitch has included multiple patterns in the IMS, but you can remove patterns that you don’t find useful or that clutter your chart. This is entirely customizable to your preferences.

Patterns and Dashboard Configuration

The dashboard is where all the pattern information is displayed. You can:

  • Position the Dashboard: Choose where the dashboard appears on your chart.
  • Adjust Font Size: If the default font size is too large or small, you can easily change it to improve readability.

This dashboard makes it easy to identify patterns in real-time and track their success rates. It’s a great tool to help you stay organized and informed during your trades.

Pattern Recognition Threshold

One of the most interesting features of the IMS indicator is the ability to modify the pattern recognition threshold. This controls how easily the system identifies patterns.

  • Threshold Value: By adjusting the threshold (for example, setting it to 0.006), you control how sensitive the indicator is to market patterns.
  • Pattern Conditions: Each pattern has specific conditions that determine how it is recognized. You can tweak these to make pattern identification more or less strict, depending on how aggressive or conservative you want your strategy to be.

This feature gives you the power to fine-tune the pattern detection to align with your trading goals.

Adapting to Market Movements: Shorts and Longs

The IMS indicator also helps traders adapt to market direction. You’ll notice that short and long signals will adjust based on the patterns and settings you’ve chosen.

  • Shorts: These signals indicate when the market is likely to move downwards.
  • Longs: These suggest that the market will move upwards.

These signals will be influenced by the pattern recognition and trend settings you’ve selected, ensuring that your trades are based on real-time market data.

Summary Table

Setting Description
Price Calculation Set to open, close, high, low, or volume-based calculations
Average Calculation Period of 10 candles (default) or adjust based on personal preference
Trend Length Default of 10, can be customized with Supertrend, Moving Averages, etc.
Patterns Add or remove patterns based on preference
Dashboard Position Customize location and font size of pattern dashboard
Pattern Recognition Adjust threshold (e.g., 0.006) to control pattern identification sensitivity