Momentum

The basic oscillator - Momentum

I would like to introduce the first oscillator called "Momentum". I'm sure that skillful traders often hear the name of this oscillator.

As technical indicators the momentum measures the rise / down “momentum” in price.

Because of simpleness of this oscillator, it has some weak points, but remains one of more useful ones or was developed to another indicators.



The most common use of this oscillator is that to buy over the 100 points on and to sell underthe line. It is more important is to compare the change in price movement and momentum.

For example, the momentum, which is now over the 100 points, goes further upward, the upward price momentum is growing more and more. On the contrary, the momentum, which is now under 100 points, falls down further under the now's point, the downward momentum is increased.

While the quotation is rising, but the momentum flatten its rise, it means weaking upward/downward trend.

In other words, the momentum and quotation show different, uncorresponding movements, the currency course may be sooner or later changed.

Technical Analysis - EURUSD

Euro/Dollar weighed down under the level of 1.5400, swallowing stops at the level of 1.5390. But the next stop-order zone at 1.5380 remained untouched. The currency pair has tested the low at 1.5386, now returned to the level of 1.5393. A clear breakedown under the stop level of 1.5380 may lead a descending movement to the previous minima level of 1.5365. Under the level there lie options at 1.5350, so in approaching to this level, orders for protecting the option level must be set by option-market traders. Daily Stochastik is coming into oversell, daily momentum shows downward movement.