Momentum & Rate of Change
The Momentum indicator and Rate of Change (ROC) are the simplest momentum tools: they compare the current price to the price a set number of bars ago to measure the speed of price change. This article explains both (Momentum as a difference, ROC as a percentage), how to read the zero line and divergence, why accelerating versus decelerating momentum matters, and how these primitives underpin more elaborate oscillators.
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Awesome Oscillator
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RSI
The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and size of recent price changes on a 0–100 scale. This article explains what RSI actually measures, the meaning (and frequent misuse) of the 70/30 overbought and oversold thresholds, the centreline at 50, and RSI divergence — where momentum and price disagree. It is emphatic that overbought is not a sell instruction and oversold is not a buy one: in strong trends RSI can stay pinned at an extreme for a long time.
Stochastic Oscillator
The Stochastic Oscillator measures where price closes within its recent high-low range, on a 0-100 scale, to flag momentum and overbought/oversold conditions. This article explains the %K and %D lines, the 80/20 zones, signal-line crossovers, divergence, the difference between fast and slow stochastics, the more sensitive Stochastic RSI, and the crucial point that 'overbought' can stay overbought in a strong trend.
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