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Book chapter
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Reference no. BEP8185
Chapter from: "Understanding Momentum in Investment Technical Analysis: Making Better Predictions Based on Price, Trend Strength, and Speed of Change"
Published by: Business Expert Press
Originally published in: 2019

Abstract

This chapter is excerpted from 'Understanding Momentum in Investment Technical Analysis: Making Better Predictions Based on Price, Trend Strength, and Speed of Change'. The concept of momentum in chart analysis is of great interest to technical analysts. Momentum indicates the strength and speed of price movement, but not the direction. It enables, through the use of index calculations, identification of conditions when a stock's price is either overbought or oversold. Momentum is most effective when used as a confirming indicator for other signals found in price, volume, or moving averages. Often overlooked by traders focused on price reversals or continuation signals, momentum provides a context to price behavior and to the price trend.

About

Abstract

This chapter is excerpted from 'Understanding Momentum in Investment Technical Analysis: Making Better Predictions Based on Price, Trend Strength, and Speed of Change'. The concept of momentum in chart analysis is of great interest to technical analysts. Momentum indicates the strength and speed of price movement, but not the direction. It enables, through the use of index calculations, identification of conditions when a stock's price is either overbought or oversold. Momentum is most effective when used as a confirming indicator for other signals found in price, volume, or moving averages. Often overlooked by traders focused on price reversals or continuation signals, momentum provides a context to price behavior and to the price trend.

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