Tag: FTSE

Momentum Indicator

Momentum Indicator

The Momentum indicator is a very simple and straight forward indicator. It tells you essentially what has been the recent change between the price of your current spread bet and the previous price of n days ago. What this relationship tells you is if your current price is stronger or weaker than the previous price. It is very similar to the ROC (Rate of Change).

It is constructed in a very simple way. It is the current price, lets say of the FTSE , minus the price of the FTSE 20 Bars ago.

 

  • Current Price – the Price N days ago.

 

Therefore if the price is below the momentum indicator, we are seeing weakness of the FTSE vs. it’s price N days ago.

If instead the price is above the momentum indicator, we are seeing strength.

 

An example of the momentum indicator:

Momentum Indicator

 

page: 

Next Page:Trading with the momentum Indicator

 

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SB