velocityIndicator
VEL's (Jurik Velocity Index) formula is based on solid Mathematics, Not ad-hoc Heuristics.
Although the algorithm behind VEL is proprietary we can disclose something about VEL's ability to create a smooth momentum with no more lag than ordinary momentum. VEL does not smooth the classical momentum signal, because any smoothing will add some amount of lag no matter what smoothing technique is applied.
VEL also does not evaluate the Momentum of a time series Smoothed by JMA.
Although taking momentum from JMA does produce a smooth signal, this method yields more lag than VEL and also has less vertical (scaling) accuracy than VEL.
VEL was specially designed to not have any more lag than you would obtain from the classical Momentum signal. The only difference is that VEL is significantly Smoother.
The classical Momentum indicator is a simple yet effective measure of market direction.
However, the curve zig-zags a lot, producing many misleading values and false alarms. Typical attempts to remove noise by applying a moving average will seriously degrade its usefulness by adding lag. Jurik Research solved this problem with an advanced momentum oscillator that produces very smooth curves without any additional lag !
Notice how VEL eliminates the zig-zagging noise inherent in a classic 10-bar momentum signal. VEL is extremely smooth, compared to the jagged momentum line. Consequently, there are fewer false signals.