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The relationship between different moving average trading rules is explained in the paper "Anatomy of Market Timing with Moving
Averages". Specifically, in this paper the author demonstrates that every trading rule can be presented as a weighted average of the momentum rules computed using different
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The conventional interpretation is to use momentum as a trend-following indicator. This means that when the indicator peaks and begins to descend, it can be considered a sell signal. The opposite conditions can be interpreted when the indicator bottoms out and begins to rise. Momentum signals (e.g.,
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The way momentum shows an absolute change means it shows for instance a $ 3 rise over 20 days, whereas ROC might show that as 0.25 for a 25% rise over the same period. One can choose between looking at a move in dollar terms, relative point terms, or proportional terms. The zero crossings are the
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When momentum crosses up through zero it corresponds to a trough in the SMA, and when it crosses down through zero it's a peak. How high (or low) momentum gets represents how steeply the SMA is rising (or falling).
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A crossing up through zero may be used as a signal to buy, or a crossing down through zero as a signal to sell. How high (or how low when negative) the indicators get shows how strong the trend is.
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409:{\displaystyle {\mathit {rate\,of\,change}}={{\mathit {close}}_{\mathit {today}}-{\mathit {close}}_{N\,{\mathit {days\,ago}}} \over {\mathit {close}}_{N\,{\mathit {days\,ago}}}}}
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605:. This relationship is not much discussed generally, but it's of interest in understanding the signals from the indicator.
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591:{\displaystyle {{\mathit {momentum}} \over N+1}={\mathit {SMA}}_{\mathit {today}}-{\mathit {SMA}}_{\mathit {yesterday}}}
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186:{\displaystyle {\mathit {momentum}}={\mathit {close}}_{\mathit {today}}-{\mathit {close}}_{N\,{\mathit {days\,ago}}}}
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same in each, of course, but the highs or lows showing strength are on the respective different bases.
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52-week high) have been shown to be used by financial analysts in their buy and sell recommendations.
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indicator is similarly based on changes in a moving average (a triple exponential in that case).
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by remaining positive while an uptrend is sustained, or negative while a downtrend is sustained.
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in general refers to prices continuing to trend. The momentum and ROC indicators show
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Rate of change scales by the old close, so as to represent the increase as a fraction,
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and the close N days ago. Momentum is the absolute difference in stock, commodity:
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Tuned, Using the Rate of Change
Indicator Programmatically
679:"The Role of Analysts' Forecasts in the Momentum Effect"
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This is the slope or steepness of the SMA line, like a
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Tuned, Using the
Momentum Indicator Programmatically
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711:Anatomy of Market Timing with Moving Averages
666:AsiaPacFinance.com Trading Indicator Glossary
8:
736:Investopedia definition, Momentum Indicator
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686:International Review of Financial Analysis
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42:showing the difference between today's
1105:Moving average convergence/divergence
7:
445:Momentum is the change in an N-day
726:Fidelity, Rate of Change Indicator
620:Other moving average trading rules
16:For other uses of "Momentum", see
14:
1210:Accumulation/distribution line
1:
677:Low, R.K.Y.; Tan, E. (2016).
1286:CBOE Market Volatility Index
927:Triple top and triple bottom
892:Double top and double bottom
1426:
1094:Know sure thing oscillator
1088:Detrended price oscillator
698:10.1016/j.irfa.2016.09.007
15:
1076:Average directional index
18:Momentum (disambiguation)
1169:Relative strength index
1082:Commodity channel index
806:Elliott wave principle
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1227:Negative volume index
1175:Stochastic oscillator
1052:Fibonacci retracement
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447:simple moving average
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188:
1410:Technical indicators
1379:Ralph Nelson Elliott
1323:McClellan oscillator
1311:Advanceâdecline line
992:Three white soldiers
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203:
53:
1186:Ultimate oscillator
1180:True strength index
847:Open-high-low-close
625:averaging periods.
1292:Standard deviation
1264:Average true range
1245:Volumeâprice trend
1100:Ichimoku KinkÅ HyÅ
907:Head and shoulders
777:Technical analysis
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28:technical analysis
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1233:On-balance volume
1128:Smart money index
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987:Three black crows
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38:(ROC) are simple
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1276:Donchian channel
1215:Ease of movement
1163:Money flow index
1144:Vortex indicator
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1006:Point and figure
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897:Flag and pennant
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852:Point and figure
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643:"Forex Momentum"
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36:rate of change
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1122:Parabolic SAR
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44:closing price
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1389:Mark Hulbert
982:Morning star
811:Market trend
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650:. Retrieved
647:TradeForexSA
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1384:John Murphy
1374:Charles Dow
1344:Ulcer index
1221:Force index
1191:Williams %R
1057:Pivot point
942:Candlestick
827:Candlestick
1317:Arms index
1256:Volatility
1134:Trend line
1111:Mass index
1044:resistance
1033:Indicators
857:Line break
801:Dow theory
652:2017-09-29
629:References
603:derivative
420:"Momentum"
40:indicators
34:(MTM) and
1369:Ned Davis
1019:Bear trap
1014:Bull trap
692:: 67â84.
540:−
295:−
128:−
25:financial
1404:Category
1357:Analysts
1155:Momentum
1078:(A.D.X.)
922:Triangle
866:Patterns
791:Breakout
784:Concepts
32:momentum
1303:Breadth
969:Complex
1319:(TRIN)
1202:Volume
1107:(MACD)
951:Simple
820:Charts
1332:Other
1313:(ADL)
1288:(VIX)
1266:(ATR)
1247:(VPT)
1241:(PCR)
1235:(OBV)
1229:(NVI)
1217:(EMV)
1182:(TSI)
1171:(RSI)
1165:(MFI)
1130:(SMI)
1124:(SAR)
1096:(KST)
1090:(DPO)
1084:(CCI)
1068:Trend
874:Chart
832:Renko
682:(PDF)
424:trend
1272:(BB)
1223:(FI)
1193:(%R)
1146:(VI)
1139:Trix
1118:(MA)
1059:(PP)
959:Doji
842:Line
837:Kagi
614:TRIX
612:The
1294:(Ï)
902:Gap
694:doi
441:SMA
23:In
1406::
690:48
688:.
684:.
645:.
30:,
769:e
762:t
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696::
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583:y
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559:y
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549:M
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525:o
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512:M
509:S
503:=
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494:+
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85:=
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71:n
68:e
65:m
62:o
59:m
20:.
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