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Momentum
Add the Momentum indicator in Quantower to measure the speed of price changes and spot trends that are accelerating or losing strength
Description
Momentum indicator shows an acceleration of price movement. From a technical point of view, it is the difference between the current price and close price N-periods ago. Firstly introduced by John J. Murphy in "Technical Analysis of the Financial Markets" Momentum fixedly joined to traders arsenal. In spite of age, this indicator is still actual and widely used.
Formula
Momentum = Close - Close(N-periods ago)
Where:
Close - current close price
Close(N-periods ago) - the close price N-periods ago
Most useful cases
Trend indicating - crossing a zero line could be used as an indicator of a new trend wave.
Divergence/Convergence - Divergence/Convergence pattern is a form of price action when a new high(low) of the price not confirmed with a new high/low of Momentum. Such price and indicator’s behavior can be interpreted as the weakness of current existing trend.
