Momentum analysis is a measure of the change in Forex trading trends over a certain period of time, similar to the RSI. The difference between momentum analysis and the RSI is that momentum gives you the option to analyze a specific rate variation in the time frame, while the RSI measures all of the rate changes in the time frame.
If the momentum is above 0, or it is seen as a rising curve, then an uptrend is present.
A buy signal is given when the momentum rises above 0, and a sell signal is given when the momentum drops below 0.
If the time frame is two weeks, for example, then the Momentum is calculated by decreasing the present day price to the price of the currency 14 days ago.
If you are in the process to learn forex trading online, then momentum analysis can really help you, giving you another tool to recognize market trends and invest accordingly.
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