Rate_Of_Change_(ROC) - Momentum And Rate Of Change Momentum...

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Momentum And Rate Of Change Momentum measures the rate of change in price as opposed to price itself. Momentum is calculated by constantly recording prices changes for a fixed period of time. When constructing a 10 day momentum line, subtract the first days close from the latest days close. The resulting number is plotted against a zero line. The shorter the time span the more sensitive the line is. The longer the time span is the less sensitive the line is. When first using momentum, one should first plot a short momentum indicator of about 6 periods. This will show where the highest points are and where the lowest bottoms are. After the short momentum line is created, mark where the highs and lows are. Then construct a longer time period momentum line of about 10 periods (although any number of periods can be used). Then the indicator can be used to buy at the predetermined lows after the indicator and price have turned up; and to sell when the
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Rate_Of_Change_(ROC) - Momentum And Rate Of Change Momentum...

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