MADAM Indicator Mechanics

• Momentum
  MADAM’s momentum structure operates through a dual-oscillator system that measures both the strength and persistence of directional force within the market. The faster oscillator tracks immediate momentum shifts, whereas the slower one smooths these fluctuations to outline the sustained directional bias. A shaded momentum fill between the two lines visually emphasizes periods of strengthening or weakening momentum, making it easier to identify when the faster line is dominating or losing influence. When the two oscillators diverge or cross, it reflects a change in control between market participants - often marking the early stages of a developing move or trend reversal. This dual structure enables traders to distinguish between short-term impulses and genuine momentum transitions, providing early and reliable context for potential shifts in market direction.
  

• Moving Average Distance (MAD)
  Complementing the momentum component, MADAM applies an adaptive moving average distance method that measures the dynamic spread between two moving averages of different sensitivities. This difference, normalized and scaled to the momentum range, reveals the underlying directional bias of the market. When the value is above the zero line, it reflects strengthening upward pressure; when below, it indicates increasing downward force. This mechanism provides an intuitive framework for interpreting market structure - showing whether the prevailing trend supports continuation or signals potential exhaustion.
  

• Bar Color Coding
  To enhance visual clarity and immediate market interpretation, MADAM integrates a color-coded bar system linked to the MAD oscillator. Bars turn green when the scaled value is positive, signaling bullish alignment, and red when negative, indicating bearish momentum. This intuitive visual cue allows traders to quickly assess prevailing market conditions, reinforcing insights from both the momentum and moving average components. By translating complex calculations into clear, at-a-glance signals, the color-coded bars help traders focus on meaningful shifts in market energy without distraction.