|
Momentum Indicator
Description
The momentum of a security is the ratio of today's price compared to
the price x-time periods ago. The formula equivalent of the
calculation is shown below:
Where:
ref(Close,-10) = The closing price 10 periods ago
Interpretation
The interpretation of the Momentum indicator is identical to
the interpretation of the Price R.O.C. Both
indicators display the rate-of-change of a security's price. The
Price R.O.C. indicator displays the rate-of-change as a percentage.
The Momentum indicator displays the rate-of-change as a ratio.
|
