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🚀 Momentum Indicators

Momentum indicators measure the speed and persistence of price moves rather than their level. They answer: "is the market pushing harder, or is it running out of steam?"

💡 What This Group Measures

Mathematically, most momentum indicators are discrete derivatives or rescaled derivatives of price (or of another oscillator, as in Stochastic RSI). They oscillate within a bounded or roughly-bounded range, which makes them natural candidates for overbought/oversold interpretation and divergence analysis (price makes a new high while momentum does not).

📋 Indicators in This Category

Indicator What It Measures Key Use Details
RSI Recent gain/loss balance Overbought/oversold, mean reversion 📖
MACD Trend acceleration Bullish/bearish crossovers 📖
ROC Percentage price change over \(N\) sessions Pure momentum, divergence spotting 📖
Stochastic RSI RSI's own overbought/oversold extremes Faster, more sensitive reversal signals 📖
PPO MACD, normalised by price Comparing momentum across assets of different price levels 📖
CCI Deviation from a typical-price average Cyclical turning points 📖

📥 Data Requirements

Indicator Inputs Notes
RSI, MACD, ROC, Stochastic RSI, PPO close Pure price-derivative oscillators
CCI high, low, close Uses the typical price \((H+L+C)/3\)

🔍 Comparison Table

Indicator Default Period(s) Output Range Bounded?
RSI 14 0–100 Yes
MACD 12 / 26 / 9 Unbounded (price units) No
ROC 12 Unbounded (%) No
Stochastic RSI 14 / 3 0–100 Yes
PPO 12 / 26 / 9 Unbounded (%) No
CCI 14 Unbounded, ±100 reference No 
flowchart LR
    P["💹 Close price"] --> RSI["💪 RSI"]
    P --> MACD["📊 MACD"]
    P --> ROC["🚀 ROC"]
    RSI --> SRSI["🎛️ Stochastic RSI"]
    MACD -->|"÷ EMA slow"| PPO["📐 PPO"]
    HLC["📈 High / Low / Close"] --> CCI["🔄 CCI"]

Bounded vs unbounded oscillators

RSI and Stochastic RSI are normalised (always 0–100), so their thresholds are universal across assets. MACD, ROC, PPO and CCI are scale-dependent — PPO exists precisely to make MACD-like momentum comparable across instruments with very different price levels.