All language subtitles for 1. Momentum Rate Of Change (ROC)

Let's talk about some more helpful tools and they revolve around momentum.

Momentum helps overcome one of our biggest challenges in technical analysis, and that big challenge

is detecting when a trend is about to end or is it a minor pullback?

Is a trend ending or is it really just kind of a minor pullback or minor temporary change in the trends

going to continue?

Momentum tools are terrific at overcoming that challenge.

So let's talk a little bit about, you know, the basic concepts of momentum that we're going to share

some specific tools to help you later in this section of first, you know, around momentum.

So what momentum is at its basic level is it really looks at the speed of a price change.

So it's actually relatively easy to calculate.

It's all going to be done for you by your platform.

But if you think about you're looking at the speed of a how how fast or slow are prices changing?

So it looks at basically the today's price, what you could be today for security.

And what was that price X number of days ago or periods ago?

Hours ago, minutes ago, whatever a number of periods are, you're going to compare those two.

And that's going to really look at a rate of change or a rate of change method.

You know, that price, some simple mathematics and percentages around that.

In fact, when you look at momentum on your platform, it might not call it momentum michault ROIC or

rate of change.

So, for example, if prices are rising fast, you know, the momentum number that you can use to kind

of use as an indicator is going to keep getting bigger and on the chart, a momentum chart.

And we'll see some examples of that in a moment or later on the section.

You know, on the chart, it's going to show rising line.

Right.

So if you see a rising line that shows prices are rising, rising fast, if the prices are rising,

but they're not rising so fast and the line will start to flatten out.

Right.

So you're going to see that line not be as steep.

It's going to start to flatten out as prices maybe are rising, but they're not rising that fast.

So momentum is all about the change in price level rather than the level itself.

So it's not about the actual specific price so much where you're really measuring is that change in

that speed of that price level.

So you might say, well, that's great, but we want more and we want even more.

And that it does quite a bit of it will measure the amount of that acceleration of that price change

or the acceleration of that price range, depending which way you're looking at it.

And then also the amount of that rate of change, momentum and indicators also will eliminate as much

noise as possible by looking at those changes.

And you can kind of see momentum in the context of an overall price range.

You know that highs and lows, what's momentum doing?

What's happening with our prices accelerating, you know, all that kind of stuff.

And it can really, really give you a good indication of whether a security might be overbought or oversold

situations, you know, overbought, where it's pretty much everybody is going to buy it at a certain

price level, has you might be ripe for time for it to kind of go backwards, are going to downtrend

or vice versa, where it's oversold, where it's the price has been really pushed to the bottom, maybe

real quickly push the bottom.

And it's really ripe for a turnaround and it might be a good buying opportunity for you.

So it's an indicator that can really help with that is a momentum.

Indicators that we have here will have can be used really well for that.

And a lot of people like to use momentum really more so as a confirming indicator.

I like that idea, too.

So if you're developing, it helps you evaluate the strength of a trend that maybe another indicator

saying there's a trend.

So your primary indicator seeing there is a trend, whether it's up or down, there is a trend.

And maybe it's something like the confirming moving crossover, our price moving average crossover,

whether it's price or the two crossovers crossing over each other, you could say, I think there's

a trend here.

I'm seeing a price crossover.

I want to confirm that with maybe with this momentum, with a momentum indicator to see if this is also

saying that we might have a situation for a good opportunity to buy or sell by looking at that price

change, acceleration and the acceleration.

So that's kind of momentum in a, you know, kind of the basic math concept and what it does, measuring

that rate of change and then from building from that basic core foundation of the momentum calculations.

There are some powerful tools that have been built on top of that that you're going to see in any of

these platforms as far as we're trading.

And we really are going to use is these types of indicators.

And the two really that stand out are the RSI or relative strength indicator and the stochastic oscillator

to what sounds like a fun name, doesn't it?

So those lessons are coming up.

But those are the key things that build on top of the idea of using momentum to look, analyze from

a technical analysis standpoint, securities.