Momentum

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Welcome to currency trading with Profiforex!
This video is devoted to the "Momentum" indicator.
To apply it to the chart, press the "Indicators" button on the toolbar and choose "Oscillators" - "Momentum."

Subsequently, the window in which we change the indicator properties appears.Here we can choose the period of averaging, method, fix maximum and minimum, and change the visualization settings.

When we're choosing the method, we specify the prices to which the indicator will apply.These are open prices, close prices,maximums, minimums and their different combinations.

The momentum indicator calculates the value of the price changes during the defined period of time.In classic literature, the signal to buy occurs when the momentum indicator forms a trough and starts its growth.

The signal to sell occurs when the indicator reaches its peak and turns downward. 

Momentum, as an oscillator, is rarely used. The continuation of the current tendency is determined if the momentum indicator has either very high or very low values,unlike the signals of other oscillators.

As one can see, the indicator generally follows the price and can be called the "impaired" version of price. That's why momentum is so rarely used.
As an oscillator, this indicator works worse than such indicators as Stochastic and MACD, while as a trend indicator it's worse than even the moving average.

This indicator can be useful for beginners who are uncertain in the face of trends and need evidence
that the price is really going up but not down.

Momentum is calculated in the following way:where "C" is the closing price of the current bar, and "Cx" is the closing price of the bar X days ago. 

When calculating the momentum, we skip "x" days, throwing out this information as insignificant. This smoothes the wrong signals,but such a rough filtration can cause (and always causes) significant misrepresentations.