Forex indicators wiki
Momentum MTM 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, commodity:.
The momentum and ROC indicators show trend by remaining positive while an uptrend is sustained, or negative while a downtrend is sustained. A crossing up through zero may be used as a signal to buy, or a crossing down through zero as a signal to sell. How high or how low when negative the indicators get shows how strong the trend is. One can choose between looking at a move in dollar terms, relative point terms, or proportional terms.
Momentum (technical analysis) - Wikipedia
The zero crossings are the same in each, of course, but the highs or lows showing strength are on the respective different bases. The conventional interpretation is to use momentum as a trend-following indicator.
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This means that when the indicator peaks and begins to descend, it can be considered a sell signal. The opposite conditions can be interpreted when the indicator bottoms out and begins to rise. This is the slope or steepness of the SMA line, like a derivative.
This relationship is not much discussed generally, but it's of interest in understanding the signals from the indicator. When momentum crosses up through zero it corresponds to a trough in the SMA, and when it crosses down through zero it's a peak.
How high or low momentum gets represents how steeply the SMA is rising or falling. The TRIX indicator is similarly based on changes in a moving average a triple exponential in that case.
The relationship between different moving average trading rules is explained in the paper "Anatomy of Market Timing with Moving Averages". From Wikipedia, the free encyclopedia.
For other uses of "Momentum", see Momentum disambiguation. International Review of Financial Analysis. Retrieved from " https: Navigation menu Personal tools Not logged in Talk Contributions Create account Log in.
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