GlossaryIntermediate
Momentum
The speed and strength of a recent price move, independent of its direction.
Momentum describes how fast and how strongly price has recently been moving — a separate question from direction alone. Two assets can be in the same uptrend while having very different momentum, if one is accelerating and the other is losing steam.
Several technical indicators are built specifically to measure momentum, including RSI, the Stochastic Oscillator, and MACD, each using a different calculation to quantify the same underlying idea: how strong is the current move, and is it strengthening or weakening.
Examples
- Price making a new high while a momentum indicator makes a lower high is a classic bearish divergence — the move is still up, but momentum is fading.
- A sharp, fast rally has strong upward momentum; a slow grind higher over months has weaker momentum even if the total price change is similar.