In July 1996 Futures magazine, E. Marshall Wall introduces the Dynamic Momentum Oscillator (Dynamo). Please refer to this article for interpretation.
The Dynamo oscillator is a normalizing function that adjusts the values of a standard oscillator for trendiness by taking the difference between the value of the oscillator and a moving average of the oscillator and then subtracting that value from the oscillator midpoint.
Dynamo Oscillator is calculated according to:
Dynamo = Mc - ( MAo - O )
where:
Mc = the midpoint of the oscillator MAo = a moving average of the oscillator O = the oscillator
Usage:
This concept can be applied to most oscillators to improve their results. This example applies it to an RSI oscillator in MetaStock:
50-(Mov(RSI(14),21,S)-RSI(14))
where: Mc = RSI's midpoint = 50 MAo = Moving average of the RSI = Mov(RSI(14),21,S O= RSI Oscillator = RSI(14)
Also with this indicator, you can adjust the moving average type and RSI calculation types dynamically.