The Momentum(Mom) of a security is the ratio of today's price compared to the price x-time periods ago. By measuring the amount that a security's price has changed over a given time span, this indicator provides an indication of a market's velocity and to some degree, a measure of the extent to which a trend still holds true. It can also be helpful in spotting likely reversal points.
You can use the Momentum indicator as a trend-following oscillator similar to the MACD and buy when the indicator bottoms and turns up. Sell when the indicator peaks and turns down. When the Mom reaches extremely high or low values (relative to historical values) assume a continuation of the current trend.
A second usage for the Momentum indicator is as a leading indicator. As a market peaks, the indicator will climb sharply before falling off. At a market bottom, the plot will drop sharply and then climb well ahead of prices.
Calculation:
PrevPrice = The previous price value
Inputs:
Price Field = Close
Indicates Open, High, Low or Closing price.
Period = 12
Indicates time period(the number of days for daily analysis, the number of weeks for weekly analysis, etc.).
Indicator Type: Momentum