The Momentum Indicator is simply the difference between the current price and the closing price a specified number of periods ago (typically 10 days, 21 days or 52 weeks ago). The indicator measures the rate at which the price of a particular stock is rising or falling.
Long positions are likely to be taken where there is strong momentum (ie. a more positive value). Short positions often being taken when there are signs of weakness with a stock’s momentum (ie. a more negative value).
Parameters