Momentum (MOM)¶
| Name | Type | Prerequisite | Use Cases |
|---|---|---|---|
| Momentum (MOM) | Momentum | OHLC Data | Simplest measure of trend strength and direction. |
Definition¶
The absolute difference in price over a fixed lookback period.
Mathematical Equation¶
\[
C_t - C_{t-n}
\]
Special cases¶
- Maximum possible value: Unbounded
- Minimum possible value: Unbounded
- Behavior: Oscillates around a zero line (or 100 line), measuring the rate of change in price.
Visualization¶
Trading Significance¶
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Category: Momentum
-
Use Case: Simplest measure of trend strength and direction.