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.