Forex glossary
Momentum Oscillator
A momentum oscillator transforms price changes or the close's position in a selected range into an indicator series. RSI, MACD and stochastic use different formulas and scales; the centerline may be 0, 50 or 100. Interpretation requires the particular indicator's definition.
Illustrative example
How does it work in practice?
Assume Momentum divides the current close by the close N periods earlier and multiplies by 100. Prices of 105 and 100 give a reading of 105; this version's neutral reference is 100.
A case to work through
A different neutral line
The hypothetical Momentum formula is current close/close N periods ago×100; prices are 96 and 100.
- The reading is 96, meaning the current price is 4% below the comparison price.
- This version's neutral value is 100 rather than RSI's midpoint of 50.
What follows? Interpret the reading using its own formula.
Example boundary: Difference-based Momentum and other oscillators use other units and scales.
A useful distinction
Momentum Oscillator / Relative Strength Index (RSI)
Ratio Momentum compares two prices around 100; RSI smooths positive and negative changes on a 0–100 scale.
Check your understanding
Calculate ratio-based Momentum and identify its reference.
Show the answer and explanation
102
102/100×100=102.
Oscillators without mixed scales
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Read the fuller explanation
Related terms
Sources and documentation
- MetaTrader 5 – Momentum
Ratio Momentum: current close divided by earlier close, multiplied by 100.
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