What Momentum Measures
Not where price is, but how fast it is getting there — and why speed fades before direction.
MomentumBuying recent winners and avoiding recent losers. indicators don’t measure price — they measure the speed and force of price movement. Think of price as position and momentumBuying recent winners and avoiding recent losers. as velocity: two different things. A stock can still be rising while its momentum is already slowing down.
Most momentumBuying recent winners and avoiding recent losers. tools are “oscillators” — they swing between bounded extremes (often 0–100) and are read for two things: *overboughtA condition suggesting price has risen too far, too fast./oversoldA condition suggesting price has fallen too far, too fast. extremes, and divergenceWhen price and a momentum indicator disagree — an early warning.* from price (covered later). They answer “how strong is this move?” not “which way is price?”
Is momentum the same as trend?
No. Trend is *direction* (which way price is going); momentum is *strength/speed* (how forcefully). A trend can still be up while momentum weakens — a common pre-reversal warning. They’re complementary readings, not the same thing.