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Indicators

Momentum

Beginner

The speed and strength of a price move; oscillators like RSI and MACD measure it.

In practice

Momentum tells traders whether a move is being pushed or is merely drifting. Large candles closing near their extremes show strong momentum; small overlapping candles show weak momentum.

Trend traders want momentum on the impulses and a lack of it on the pullbacks. Momentum that fades as price reaches a key level is a reason to expect a reaction there.

What to watch for

Strong momentum tends to continue longer than seems reasonable, so betting against it early is costly. It also changes quickly around news, where one candle can reverse the reading of an hour.

Entrix Academy

Learn these terms step by step, one lesson free

Entrix Academy is the trading course inside EntrixAlgo. It teaches the ideas in this glossary with interactive lessons, practice and a final exam. It is part of Pro, and a free account opens one lesson of your choice.

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