Momentum indicators

Momentum is the key feature for movement. The same is true for trading.
It’s easier to push a moving wagon than to make it start. The same is true for trading.
Momentum traders need tools to understand if an asset is likely to start to move, continue it’s move or reverse and go the opposite direction.

What are momentum indicators?

Momentum indicators are technical analysis tools to help traders understand if price has the energy to move (hence momentum). They often are computed using price movement, closing price and current price.

The most popular momentum indicators are RSI, Stochastic Oscillator, MACD Indicator and many more are available (more than 20 different indicators).

Each of these technical indicators are very easy to add to your price chart using TradingView. As you likely noticed, most of the price charts visible on our site are taken from this tool.
Click here if you want to test TradingView for free!

How to use momentum indicators?

Momentum indicators can be used in 2 principal ways:

  • Standalone as their value reaches overbought or oversold conditions. It happens for example when price moves down for a long period of time. Indicators would then reach oversold levels
  • In conjunction with the price with bearish or bullish divergence. It happens for example when the price made a new high but the indicator did not. It here creates a bearish divergence and hints as a sell signal and a trend reversal.

Keep in mind that although very powerful, as everything else in technical analysis, it remains based on probabilities and can create false signals.

Momentum indicators allow traders to better understand the speed at which the price of a given security changes. They are a great hint to understand the strength of price movements.

What are the current market trends?
Is it a strong trend or will the current trend likely to reverse?
You need good tools to figure out!

There are many different momentum indicators

Here, you’ll find more than 20 momentum indicators described here. Each of them can greatly integrate with chart patterns so you can increase your chance of a trade going your way.

Want to go into the details of a specific volume indicator? You’re at the right place!
Feel free to discover the detailed article for each and every volume indicator right below :

McClellan Oscillator: All the indicator secrets

McClellan Oscillator: All the indicator secrets

The McClellan Oscillator is a market breadth indicator.The interpretation is similar to the MACD indicator. What is the McClellan Oscillator? The McClellan Oscillator is a technical analysis indicator. It quantifies the difference between the advancing and declining...

read more
Percentage Price Oscillator indicator

Percentage Price Oscillator indicator

The Percentage Price Oscillator is based off 2 moving averages.It is very similar to the MACD indicator. The Percentage Price Oscillator (PPO) is a technical analysis tool that measures the relationship between the two moving averages in terms of percentage. These two...

read more
Accelerator Oscillator: How to trade it?

Accelerator Oscillator: How to trade it?

The Accelerator Oscillator helps gauge the momentum in the market.It helps predict when the momentum will change.The Accelerator Oscillator measures the acceleration or deceleration of the current driving force in the market. The Accelerator Oscillator (AC indicator)...

read more
Chande Momentum Oscillator: What is it?

Chande Momentum Oscillator: What is it?

The Chande Momentum Oscillator (CMO) is a momentum indicator.It is calculated as the difference between the sum of all recent ups and the sum of all recent downs and then divided by the sum of all price movements during a predefined period. The Chande Momentum...

read more
Disparity Index indicator: How to trade with it?

Disparity Index indicator: How to trade with it?

The Disparity Index is a momentum indicator.It shows which direction a security is heading compared to a moving average.Big moves can hint for a price correction (it acts like a overbought/oversold situation). Disparity index (DI) indicator is a technical momentum...

read more
Stochastic Momentum Index: Upgraded Indicator

Stochastic Momentum Index: Upgraded Indicator

The Stochastic Momentum Index (SMI) is based in the Stochastic Oscillator.The SMI show the distance between the closing price and the center of each candles high/low range.It ranges between -100 and 100. William Blau developed the stochastic momentum index (SMI)...

read more
True Strength Index Indicator: What is it?

True Strength Index Indicator: What is it?

The True Strength Index (TSI) is a very popular and widely used momentum oscillator.It helps traders determine the trend and overbought/oversold market conditions. True Strength Index (TSI) is a very popular and widely used momentum oscillator that helps to determine...

read more
TRIX Indicator: How to trade with it?

TRIX Indicator: How to trade with it?

The Triple Exponential Moving Average (TRIX) helps investors determine the price momentum and identify oversold and overbought signals in a financial asset.It is composed of 3 main components: Zero line, TRIX line, Percentage Scale What is the TRIX Indicator? The...

read more
Chaikin Oscillator: A great tools for traders?

Chaikin Oscillator: A great tools for traders?

The Chaikin oscillator measures the Accumulation/Distribution Line of MACD.A cross above the ADL indicates that investors are accumulating (buying). Price follows volume, based on an old investing axiom. When traders buy a large number of shares of a stock that appear...

read more
Commodity Channel Index Indicator: Full Guide

Commodity Channel Index Indicator: Full Guide

The Commodity Channel Index is a momentum-based indicator.It helps traders determine when an investment vehicle gets to a condition of being overbought or oversold.This information makes it possible for traders to know if they want to enter or leave a trade. The...

read more
Ultimate Oscillator: How to trade it?

Ultimate Oscillator: How to trade it?

The Ultimate Oscillator is a momentum indicator.It integrates three various times within one value.It directs traders on how to better time their entry and exits in the market.  The ultimate oscillator is a momentum indicator. It grabs momentum across three...

read more
Coppock Curve Indicator: Trade it like a pro

Coppock Curve Indicator: Trade it like a pro

The Coppock Curve indicatoris a momentum indicator.It helps to identify long-term trading opportunities in the stock market.The Zero-Line functions as a trade-trigger. It gives the buying signal when the Coppock Curve is above zero and selling signals when the Coppock...

read more
Money Flow Index Indicator: Full Guide

Money Flow Index Indicator: Full Guide

The Money Flow Index (MFI) indicator is a momentum indicator.When MFI is above 80, the market is considered overbought.When MFI is below 20, the market is considered oversold.The indicator value can be used on its own, but it also can be used when it draws in...

read more
Awesome Oscillator Indicator: Definition

Awesome Oscillator Indicator: Definition

The legendary chartist, Bill Williams created the Awesome Oscillator indicator. He showed it as the best momentum indicator that is as simple as it is elegant. Traders use it to determine the momentum of the asset at hand in the course of recent events within the...

read more
Williams %R indicator: The Complete Guide

Williams %R indicator: The Complete Guide

The Williams %R indicator oscillates between 0 and -100.When its value is above -20, it sends an overbought signal.When its value is below -80, it sends an oversold signal.Overbought and oversold signals are clues the price is reaching extremes. What is the Williams...

read more
Ease of Movement Indicator: Definition

Ease of Movement Indicator: Definition

Ease of movement (EMV) momentum indicator shows the link between the rate of change in the price of an asset and its volume. It is best to use it for the daily chart and longer timeframes. Just as its name implies, the bigger the magnitude of the indicator, the easier...

read more
Stochastic RSI indicator: Full Guide [2021]

Stochastic RSI indicator: Full Guide [2021]

The oscillator helps trader take advantage of both momentum indicators to make another indicator. The new indicator is more sensitive and synchronises well to the historical performance of a particular security. It doesn’t generalized analysis of price variation. In...

read more
Rate of Change Indicator: Complete Guide [2021]

Rate of Change Indicator: Complete Guide [2021]

The Rate of Change (RoC) indicator is an unbounded momentum oscillator.Three main states are possible:A rising RoC above zero typically confirms an uptrend A falling RoC below zero indicates a downtrendA RoC hovering near zero hints for consolidation What is the ROC...

read more
Know Sure Thing (KST) Indicator: Full Guide

Know Sure Thing (KST) Indicator: Full Guide

The Know Sure Thing indicator, or KST, is a momentum oscillator.It takes into account four time periods (and not a single one as other indicators).It gives traders a bullish or bearish biais. The Know Sure Thing (KST) indicator that gives bullish and bearish...

read more
Chaikin Money Flow Indicator (CMF)

Chaikin Money Flow Indicator (CMF)

Created by Marc Chaikin, this Chaikin Money Flow indicator measures the amount of money flow volume over a particular time. Money flow volume is the basis for the accumulation/distribution Line. Rather than having a cumulative total, Chaikin money flow combines money...

read more
Momentum Indicator (MOM): Full Guide

Momentum Indicator (MOM): Full Guide

Traders use momentum indicators to have a better understanding of the speed or rate at which the price of a security changes. Momentum indicators are best used with other indicators and tools because they don’t work to detect the direction of movement, only the...

read more
MACD Indicator: The Ultimate Guide [2021]

MACD Indicator: The Ultimate Guide [2021]

The Moving Average Convergence Divergence (MACD) is both a momentum and trend following indicator.It is calculated by subtracting the 26-period EMA (Exponential Moving Average) from the 12-period EMA.There are several ways to read it:When the lines crossWhen the...

read more
Stochastic Oscillator: Full Trading Guide [2021]

Stochastic Oscillator: Full Trading Guide [2021]

The stochastic oscillator is a popular momentum technical indicator.It gives traders overbought and oversold signals. What is the Stochastic indicator? The Stochastic Oscillator is a momentum indicator A stochastic oscillator is a momentum indicator that compares a...

read more
Relative Strength Index (RSI): Complete Guide

Relative Strength Index (RSI): Complete Guide

The RSI (Relative Strength Index) indicator is a popular momentum oscillator.It provides traders with bullish and bearish price momentum signal.When the RSI is above 70%, it's considered overbought; when it's below 30%, it's considered oversold. What is the Relative...

read more

Do you want the best course about candlestick patterns?

XTB broker logoWe loved Marwood Research’s course “Candlestick Analysis For Professional Traders“. Do you want to follow a great video course and deep dive into 26 candlestick patterns (and compare their success rates)? Then make sure to check this course!
PS: Get 20% off with the code SAVE20

PatternsWizard book - Every Candlestick Patterns Statistics

"Every Candlestick Patterns Statistics", the last trading book you'll ever need!

Pre-register now and receive the candlestick patterns statistics ultimate ebook for free before anyone else!

"All you need is one pattern to make a living."
- Linda Raschke

Awesome move! We are giving the last touch to the "Every Candlestick Patterns Statistics" book. We are very excited to send it to you right when it's ready. In the meantime, we'd like to gift you our trading roadmap and its best 55 resources. You'll shortly receive an email with the link. Don't miss it ;) Stay tuned 📈