The Momentum Indicator identifies when the price is moving upwards or downwards, and by how much.. The Momentum indicator compares the most recent closing price to a previous closing price of any time frame. The Momentum indicator is regarded as an excellent gauge of market strength. A shorter period setting will create a more sensitive indicator, but will also increase choppiness and the potential for increased false signals.
\[MI = Current\;Price – Price_{n-periods\;ago} \]