The Momentum technical indicator measures the amount that a security’s price has changed over a given time period.
There are basically two ways to use the Momentum indicator:
If the Momentum indicator reaches extremely high or low values (relative to its historical values), you should assume a continuation of the current trend. For example, if the Momentum indicator reaches extremely high values and then turns down, you should assume prices will probably go still higher. In either case, only trade after prices confirm the signal generated by the indicator (e.g., if prices peak and turn down, wait for prices to begin to fall before selling).
As a market peaks, the Momentum indicator will climb sharply and then fall off - diverging from the continued upward or sideways movement of the price. Similarly, at a market bottom, Momentum will drop sharply and then begin to climb well ahead of prices. Both of these situations result in divergences between the indicator and prices.
Momentum is calculated as a ratio of today’s price to the price several (N) periods ago.
MOMENTUM = CLOSE (i) / CLOSE (i - n) * 100
Translated from Russian by MetaQuotes Software Corp.
Original code: https://www.mql5.com/ru/code/40
The Acceleration/Deceleration Indicator (AC) measures acceleration and deceleration of the current driving force.Average Directional Movement Index (ADX)
The Average Directional Movement Index Indicator (ADX) helps to determine if there is a price trend.