100. It should be noted that there are two approaches as to the calculation of a momentum. Momentum indicators ideally gauge whether the market is overbought or oversold during its non-trending state, and highlight potential reversal points before those actually occur. The Momentum (18) line at the same time shall move higher than the level 100. A shorter period setting will create a more sensitive indicator, but will also increase choppiness and the potential for increased false signals.
I am sharing my trading system as below. The momentum indicator is a basic indicator found on all MT4 platforms.
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The Momentum indicator is common on Metatrader4 trading software, and the calculation formula sequence involves these straightforward steps: Choose a predetermined period X (Standard value is 14, although a value of 8 or 9 tends to be more sensitive Calculate Close1 as the closing price. The Momentum indicator is regarded as an excellent gauge of market strength. As a rule Momentum Forex system signals appear consistently in such system. We like to call them fakeouts. Such Momentum has been built in all exchange terminals. This pulse indicator is the excellent sensor of the market force, but it is necessary to use it carefully. When the market approaches a swing point, then there often take place divergence situations with the price chart on the Momentum line which is rather strong trading signal. Nevertheless, such Momentum Forex strategy recommends opening transactions only after confirmation from additional indicators. We can see those dollar signs flashing in your eyes! The Momentum is viewed as a leading indicator, in that its signals foretell that a change in trend is imminent.