INCREASING (Price Momentum Indicator)
The Increasing indicator is a technical analysis tool that identifies consecutive periods of rising prices. It helps traders spot developing uptrends and potential momentum shifts by measuring the consistency of price increases over a specified timeframe.
Formula
INCREASING = Count of consecutive periods where:
Price(t) > Price(t-1)
Where:
t = current period
Price = closing price or other reference price
How INCREASING Works
The Increasing indicator tracks consecutive periods where prices are higher than the previous period. A longer streak of increasing prices suggests stronger upward momentum and a more established uptrend. The indicator resets to zero when a price decrease occurs, helping traders identify breaks in momentum and potential trend changes.
Trading Strategies Using INCREASING
Strategy Examples
- Enter long positions after a minimum number of increasing periods
- Use increasing streaks to confirm trend strength
- Monitor streak breaks for potential reversals
- Combine with volume analysis for confirmation
- Use multiple timeframe analysis for better accuracy
Support and Resistance Strategy
- Use increasing streaks to identify strong resistance breakouts
- Look for failed increasing sequences at resistance levels
- Monitor streak length at key price levels
- Combine with volume for breakout confirmation
- Use streak resets to identify potential support levels
Trend Identification
- Strong uptrend: Long increasing sequences
- Weak uptrend: Short increasing sequences
- Trend reversal: Sequence breaks
- Consolidation: Frequent sequence resets
- Momentum strength: Length of increasing streak
Advantages and Limitations
Advantages
- Simple and clear trend identification
- Easy to interpret momentum strength
- Clear entry and exit signals
- Works well in trending markets
Limitations
- Can give false signals in choppy markets
- May miss opportunities in ranging markets
- Sensitive to minor price fluctuations
- Requires confirmation from other indicators
Best Practices When Using Increasing Indicator
- Use multiple timeframes to confirm increasing sequences
- Combine with volume analysis for stronger validation
- Wait for clear sequence breaks before taking counter-trend positions
- Monitor streak length to gauge momentum strength
- Use increasing sequences to identify potential breakout levels
- Consider market conditions when interpreting sequence lengths
- Look for divergences between price and sequence patterns
- Document which sequence lengths work best for your trading style
- Adjust sequence requirements based on market volatility
- Regularly review and optimize your increasing indicator strategy