Momentum Indicator

The Momentum Indicator is a simple trend indicator consisting of the ratio today's close price to the close 'n' periods ago, displayed as a percentage.

Momentum Indicator

The Momentum Indicator is a simple trend indicator consisting of the ratio today's close price to the close 'n' periods ago, displayed as a percentage.

 


Momentum Indicator Calculation

Momentum Indicator = 100 * (Close[0] / Close[n])

where:

  • Close[0] is today's closing price
  • Close[n] is the closing price n periods ago

Momentum Indicator Interpretation

Buy signals are indicated when the Momentum Indicator reaches a trough and begins to turn up and sell signals are indicated when the Momentum Indicator reaches a peak and begins to turn down. 



Price chart with momentum indicator displayed below

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