Momentum and rate of change
How quickly price is moving and whether acceleration is changing.
Momentum and rate of change
Momentum describes the speed and strength of price movement. Rate of Change compares current price with price a specified number of periods earlier.
| Concept | Explanation | |---|---| | Positive momentum | Price is advancing relative to the comparison period. | | Negative momentum | Price is declining relative to the comparison period. | | Momentum breakout | Momentum moves beyond a prior range or threshold. | | Momentum reversal | Momentum changes direction, which may precede or accompany a price reversal. | | Acceleration | Momentum becomes stronger in the current direction. | | Deceleration | Momentum remains directional but loses strength. |
Momentum can weaken while price continues rising. This is a warning, not proof that price must reverse.