The Momentum indicator measures how much the price of a market instrument has changed in a given period of time.

The indicator can be used as a trend-following oscillator in a similar way to MACD:

  • It’s a buy signal when the indicator reaches a bottom and then turns upwards
  • It’s a sell signal when the indicator reaches a top and then turns downwards
However, if the indicator reaches an extremely high or low value compared to historical values, you should assume a continuation:
  • The price will continue to rise if the indicator reaches a very high top and then falls
  • The price will continue to fall if the indicator reaches a very low bottom and then rises

Wait for the price to confirm these signals before trading.

You can also use the Momentum indicator to predict price tops and bottoms:

  • Prices rise rapidly as a top approaches – everyone expects the price to go up
  • The Momentum indicator will peak and then turn well before the price starts to fall
  • Prices fall swiftly when a bottom is imminent – everyone wants to get out
  • The Momentum indicator will bottom and then turn in advance of the price
Hint: It’s easier to spot tops and bottoms if you plot a short-term moving average for the indicator.



Momentum is the ratio of the current closing price to the closing price in an earlier interval.

MOMENTUM = CLOSE( J ) / CLOSE( J – N ) * 100

J is the current interval

N is the gap between the intervals that are being compared

You can find more information about technical indicators in the MetaTrader 4 User Guide. Select Help > Help Topics > Analytics > Technical Indicators.