Momentum Indicators
Momentum indicators are technical analysis tools that measure the rate of change in price movements. They help traders identify the strength of a trend, potential reversal points, and overbought or oversold conditions in the market.
Key Characteristics
- Oscillators: Most momentum indicators oscillate between fixed boundaries (e.g., 0-100)
- Leading Indicators: Often provide signals before price reversals occur
- Overbought/Oversold Levels: Help identify extreme market conditions
- Divergence: Can reveal weakening trends when price and indicator move in opposite directions
Common Use Cases
- Trend Confirmation: Validate the strength of existing trends
- Reversal Signals: Identify potential turning points in the market
- Entry/Exit Points: Time trade entries and exits based on momentum shifts
- Risk Management: Avoid trading during unfavorable momentum conditions
Chande Momentum Oscillator
Captures price momentum by comparing recent gains to recent losses over a specific period.
Learn MoreMoney Flow Index
Volume-weighted RSI that identifies overbought/oversold conditions using price and volume data.
Learn MorePercentage Price Oscillator (PPO)
Shows the percentage difference between two moving averages to identify momentum shifts.
Learn MoreRelative Strength Index (RSI)
Momentum oscillator measuring overbought and oversold conditions on a 0-100 scale.
Learn MoreSlow Stochastic Oscillator
Smoothed version of the stochastic oscillator that reduces false signals and noise.
Learn MoreStochastic Oscillator
Compares closing price to price range over time to identify overbought/oversold levels.
Learn MoreWilliams %R
Momentum indicator measuring overbought/oversold levels from -100 to 0 scale.
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