Momentum (MOM)

Momentum (MOM) is the simplest momentum indicator. It measures the absolute change in price over a specified number of periods. Unlike ROC which gives a percentage, Momentum gives the raw price difference, making it unbounded and oscillating around zero.

Momentum simply subtracts the price N periods ago from the current price:

Momentum = Close - Close[N]

Positive values mean the current price is higher than N periods ago; negative means lower.

• Above 0 — Price is rising compared to N bars ago
• Below 0 — Price is falling compared to N bars ago
• Rising Momentum — Acceleration of price movement upward
• Falling Momentum — Acceleration of price movement downward
• Zero line — Key reference point for direction changes

Buy signals

• Momentum crosses above 0 (price now above N-period-ago price)
• Momentum is positive and increasing (accelerating uptrend)
• Bullish divergence: price makes lower low, Momentum makes higher low

Sell signals

• Momentum crosses below 0 (price now below N-period-ago price)
• Momentum is negative and decreasing (accelerating downtrend)
• Bearish divergence: price makes higher high, Momentum makes lower high

| Parameter | Default | Description | |-----------|---------|-------------| | Period | 10 | Number of bars to compare against |

| Condition | Meaning | |-----------|---------| | MOM(10) > 0 | Positive price change over 10 bars | | MOM(10) < 0 | Negative price change over 10 bars | | MOM(10) cross_over 0 | Momentum turned positive | | MOM(10) cross_under 0 | Momentum turned negative |

• Momentum is the foundation of many other indicators (ROC, MACD, etc.)
• Scale depends on asset price — a 100-point move means different things for different assets
• Use percentage-based ROC if you need to compare across assets
• Best combined with trend-following indicators for trade confirmation
• Watch for Momentum flattening as an early sign of trend weakening