Core Concepts
Momentum
The strength and speed of a price movement
Momentum measures how strongly and quickly price is moving in a direction. Strong momentum suggests the move will continue, while weakening momentum warns of potential reversal or consolidation.
✓How to Recognize
- •Large candles in the trend direction
- •Increasing volume with price movement
- •Momentum indicators (RSI, MACD) confirming
- •Little resistance to price movement
⚡How to Avoid
- →Don't fight strong momentum
- →Wait for momentum to fade before counter-trend
- →Use momentum indicators as confirmation
- →Weakening momentum warns of reversal