This is still an experimental script under development.
The script takes the Percentage change/ratio of shorter time frame (for eg: 21) over the 200 period and plots the widening.
This can be used as an indication of or momentum in a certain direction. Plotting an on this indicator results in a much more correlated and smoother to price which can be used to trade as follows.
When price is above 200EMA, longs when on the width ratio is in oversold zone is profitable. Buy at over sold and close at over bought.
When price is below 200EMA, shorts when on the width ratio is in overbought zone is profitable. Sell at over bought and close at over sold.
In the next versions I plan on implementing further improvements like:
1. Color coding direction of market
2. Combining on into a single indicator.
3. Converting indicator to a strategy.