Momentum
The rate of change of price — how fast and with what force price is moving in a given direction.
Momentum describes whether price is accelerating or decelerating. High momentum means price is covering ground quickly; fading momentum is often the first warning that a move is losing conviction before price itself reverses.
Momentum is measured with oscillators (RSI, MACD, Rate of Change) and observed directly in price — wide-range candles with closes near highs/lows indicate strong momentum; small-body candles with large wicks indicate it is fading. Divergence between price and a momentum indicator is one of the most-watched signals in technical analysis.
Related Terms
Divergence
Price making a new high/low while a momentum indicator fails to confirm — a warning that the current move may be losing steam.
IntermediateMoving Average
The average closing price over N periods, updated each bar — smooths noise and exposes the underlying trend direction.
BeginnerRetracement
A partial price reversal within a larger trend, measured as a percentage of the preceding impulse move.
BeginnerReversal
A sustained change in the direction of the prevailing trend, not just a temporary counter-move.
IntermediateTrend Following
A strategy that enters in the direction of the established trend and rides it until structural evidence of a reversal appears.
Intermediate