Define: Momentum Indicator

UK Accounting Glossary

Definition: Momentum Indicator



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Full Definition of Momentum Indicator


The Momentum Indicator is a simple trend indicator consisting of the ratio today’s close price to the close ‘n’ periods ago, displayed as a percentage.

Momentum Indicator Calculation

Momentum Indicator = 100 * (Close[0] / Close[n])

where:

Application of Momentum Indicator

Buy signals are indicated when the Momentum Indicator reaches a trough and begins to turn up and sell signals are indicated when the Momentum Indicator reaches a peak and begins to turn down.


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Definition Sources


Definitions for Momentum Indicator are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 23rd March 2020.