Relative Strength Index (RSI) and Other Momentum Indicators
Momentum in the financial markets is defined as the tendency for prices to continue moving in the same direction.Increasing momentum in an uptrend signals the potential for prices to continue rising while in a downtrend, increasing momentum signals the potential for prices to continue falling. Momentum shows the force of buying or selling pressure and is used to measure how strong the trend will be.Momentum based indicators are key elements in understanding price action trends. It is a commonly known fact that momentum leads price, meaning that new highs in the momentum can often predict new highs in prices and vice versa on the downside.A change in momentum is generally followed by a change in price direction, which could be a correction or a trend reversal itself.
Types of Momentum Indicators
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