Momentum: DMI/ADX, Volume, BBWP

Goal: Explain how momentum and volatility state earn points (2 + 1 + 3).

DMI / ADX — 2 points

Direction and trend strength. DMI says which side is in control; ADX says how strongly. The dimension pays when directional control agrees with the setup — a reversal long earns these points when the bearish push is exhausting in a measurable way, not just visually. Panel read: DMI bull / bear / chop plus the ADX value.

Volume — 1 point

The confirmation candle must show participation — at least 80% of the volume moving average. A reclaim on dead volume is a drift, not a decision. One point, because volume confirms but rarely leads.

BBWP — 3 points, tied for heaviest

Bollinger Band Width Percentile — the volatility regime gauge. It answers: how compressed is this market relative to its own recent history? Compressed (cold) markets are loaded springs — reversals fired from compression travel. The dimension pays maximum from cold, less as volatility builds, and nothing when the market is already hot — because by then the energy is spent and you are late. Panel read: BBWP %.

Why BBWP earns 3: the same sweep is worth more from compression than from exhaustion. Volatility state is the multiplier on every other dimension, so it carries event-level weight.

Takeaways

▸ DMI/ADX: who is in control and how strongly (2).
▸ Volume: did anyone actually show up for the reclaim (1).
▸ BBWP: how much energy is stored in the spring (3, regime-graded, zero when hot).

Checkpoint

Answer all questions correctly to complete the lesson. Misses reset for another pass — no penalty.

1. BBWP pays ZERO when the market is:

2. Volume confirmation requires at least:

3. Why does BBWP carry event-level weight?