Momentum Indicator | Technical Indicators | BCI Futures


The Momentum indicator is an overbought/oversold oscillator. It is calculated by subtracting the price of (LENGTH) bars ago from the price of the current bar. If the market has increased by more than x points, the market is considered to be overbought. If the market has decreased by more than x points, the market is considered to be oversold.


Conventional Analysis:

A positive value reflects an overbought market while a negative value reflects an oversold market.

Additional Analysis:

While the default input is price, some average of price may be more useful depending upon an individual’s trading style. In addition to the actual level of Momentum, consideration should be given to the bar to bar change in momentum. Early indications of a rally following an oversold condition may be evidenced by an up turn in momentum.

Additional References:

Kaufman, Perry J. The Commodity Trading Systems & Methods. John Wiley & Sons, Inc. New York. 1978.

See also  Crude Seasonal Chart