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Momentum (MOM)

Classic momentum classic trend

A simple indicator that measures the amount that a security’s price has changed over a given span of time.

Usage

Use to measure the velocity of price changes. Positive values indicate an uptrend, while negative values indicate a downtrend.

Background

Momentum is one of the most basic and powerful concepts in technical analysis. It measures the rate of change of an asset’s price, providing a clear indication of trend strength and potential exhaustion before the actual price reversal occurs. — StockCharts ChartSchool

Parameters

  • timeperiod (default: 10): Lookback period

Formula

[ MOM = Price_t - Price_{t-n} ]

Source