Momentum
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Description
The Momentum indicator measures the amount that a security’s price has changed over a given time span. The Momentum indicator is an overbought/oversold oscillator. It is calculated by subtracting a past price from the current price. The difference between the two is the term, which you specify.
A positive value reflects an overbought market while a negative value reflects an oversold market. While the default input is price, some average of price may be more useful depending upon an individual's trading style. In addition to the actual level of Momentum, consideration should be given to the bar to bar change in momentum. Early indications of a rally following an oversold condition may be evidenced by an up turn in Momentum.
If the market has increased by more than x points, the market is considered to be overbought. If the market has decreased by more than x points, the market is considered to be oversold.
The Close Price is used in the Momentum calculation.
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