Forex Momentum Indicators
Momentum indicators in Forex records the speed of prices moving over certain time period. At the same time Momentum indicators track strength and weakness of a trend as it progresses over a given period of time: the highest momentum is always registered at the beginning of a trend, the lowest - at its end point.
Momentum Indicators in Forex
How to trade with Momentum Indicators
With Momentum indicators Forex traders look for controversy between chart prices and Indicator suggestions:
A. directional divergence between the price and momentum signals of a trend's developing weakness.
B. price spikes that occur during weak momentum, are the last warning signals of the trend change.
C. also trend change should be expected during sideways moving prices and controversially strong momentum.
Momentum indicators, such as RSI and Stochastic, are favorite indicators for non-trending markets. Momentum indicators ideally gauge whether the market is overbought or oversold during its non-trending state, and highlight potential reversal points before those actually occur.