Momentum is another word for how the price on your charts moves. Momentum analysis, though, is one of the most important skills any trader can learn.
What is momentum?
First of all, we need to understand what momentum actually means but this is straightforward.
Momentum = Trend strength
There are two ways of looking at momentum. The first one just looks at the overall trend strength.
When the price is in a strong or healthy trend, traders say that the momentum is bullish or bearish (in a downtrend).
When we come to the micro level later, we will see that momentum also exists when we just look at individual candlesticks. A long candlestick without wicks (shadows) usually is considered a high momentum candlestick.
What is momentum?
First of all, we need to understand what momentum actually means but this is straightforward.
Momentum = Trend strength
There are two ways of looking at momentum. The first one just looks at the overall trend strength.
When the price is in a strong or healthy trend, traders say that the momentum is bullish or bearish (in a downtrend).
When we come to the micro level later, we will see that momentum also exists when we just look at individual candlesticks. A long candlestick without wicks (shadows) usually is considered a high momentum candlestick.
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