We have done 21 Metatrader tips on Surf’s Up. So if you missed any, or simply want to take a look at any previous articles (Click HERE). Today, we will focus on how to use the Momentum Forex Indicator, part of the indicators suite of MT4 and MT5.
A little about momentum indicators…
Momentum indicators measure the price variation of a given security’s price between today ‘t’ and the security’s price ‘N’ days ago. They make part of the list of technical analysis tools and are used to determine the strength or weakness of prices
There are two ways to use the Indicator:
- As an oscillator that can give us the direction of a trendline. Long positions should be taken when the indicator is low and turns upwards. Short positions should be taken when it is up and turns downwards.
- It can also be used as a lead indicator. When the market reaches maximums, these are identified as a rise in the prices. It works also when minimums are reached and the prices drop.
The parameters are:
Period: Number of periods used to calcúlate the line. In this case, 9 periods are used.
Apply to: In this case, it is applied to the CLOSE.