Momentum
Today's close minus the close N bars ago, in price units.
Momentum oscillatorsBest on 3M, 6MAlso called price momentum
What it shows
Momentum is the raw difference between today's close and the close N bars ago. If the stock closed at 110 today and 100 ten bars ago, 10-bar momentum is 10.
It is positive when price is above where it was N bars ago and negative when below.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Pick N (10).
- Momentum = close − close N bars ago.
- Plot under the price.
- Mark zero.
Starting values: N 10. These are proposed and will be tuned on real price data before launch.
How to read it
- The panel shows the price difference.
- Above zero: higher than N bars ago.
- Peaks show the largest gains over N bars.
Status labels you may see
| Label | What it means |
|---|---|
| Positive | Momentum is above zero. |
| Negative | Momentum is below zero. |
| Near zero | Within 1% of price. |
What cancels it
Nothing cancels it.
What traders check next
- Whether momentum is rising or falling.
- Compared with its last peak.
- Price trend.
Limits
- In price units, not comparable across stocks.
- Jumps when old values leave the window.
- Choice of N.
Try it in forecastviz
- Open any ticker and choose Momentum oscillators → Momentum in the left menu.
- Switch between 3M, 6M to see how the picture changes.
- Compare with Rate of change and Percentage price oscillator on the same chart.
Questions
Can I compare stocks?
Use rate of change, which is in percent.
Is rising momentum good?
It means price is rising faster. No claim beyond that.
Related trends
Further reading
- Wilder, New Concepts in Technical Trading Systems
- Appel, Technical Analysis: Power Tools for Active Investors
- Murphy, Technical Analysis of the Financial Markets
- Kaufman, Trading Systems and Methods
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.