Momentum

What is the definition of Momentum?

An oscillator that measures the rate of price change (as opposed to the actual levels themselves). It is calculated by taking price differences for a fixed time interval. This positive or negative value is plotted around a zero line.

Momentum is used to detect trend weakness and likely reversal points. It is often underrated because of its simplicity. High Momentum readings (positive or negative) occur when a trend is at its strongest.


Stockopedia explains Momentum...

Momentum and rate of change (ROC) are simple technical analysis indicators showing the difference between today's closing price and the close N days ago. Momentum is the absolute difference in stock, whereas rate of change scales by the old close



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