Momentum oscillator
Also called: oscillator, oscillators, divergence
An indicator that describes the speed or strength of recent price changes, usually swinging between fixed limits.
RSI, the stochastic oscillator and MACD are common examples. A divergence, when price makes a new extreme but the oscillator does not, shows slowing momentum, but it is a weak signal on its own and often fails in strong trends.
Learn more in these lessons
- The relative strength index (RSI)How is RSI calculated, and does an RSI above 70 mean a fall is coming?
- MACDHow does MACD work, and are its crossovers early signals?
- The stochastic oscillatorHow does the stochastic oscillator work, and when does it mislead?
- On-balance volumeWhat is on-balance volume, and does it show smart money buying?
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