What is the Momentum indicator?
Momentum indicator is a technical analysis tool that helps traders find the possible trends and reversals using the past data of a security. This indicator measures the speed or rate at which the security price changes. It helps traders to identify whether an asset is at an oversold level or overbought level or whether it is trending up or down. This indicator complements other trend indicators really well as they only pinpoint a time period in which the change in the market price is taking place. It is never advised to use the Momentum indicator solely but rather you should use the combination of the Momentum indicator with the trend indicators to gain the best results.
How to add a Momentum indicator on the Binomo trading platform?
In order to add a Momentum indicator on the Binomo trading platform you need to follow the steps given below.
Step 1: First of all, you need to be a member of Binomo. In case, you are not click here.
Step 2: Log in to your Binomo account and open the trading dashboard.
Step 3: Set your default chat to candlestick and set the period of the candlestick chart as per your trading nature.
Step 4: Select your desired currency. If you are a beginner you should always select less volatile currencies like NZD USD, USD JPY & more
Step 5; Click on the indicator button and search for the Momentum indicator in the list.
Step 6: Click the indicator name and configure the indicator as per your requirements and once you are done click apply.
Trading Opportunities with Momentum Indicator
Trading with Candles plus Support and Resistance: When the red candles and green candle tops are at the same distance (also called resistance level) plus the Momentum indicator line is at an overbought level it signals an upcoming bearish trend and you can consider placing a sell trade similarly, When the red candle and green candle bottoms is at the same distance (also called support level) plus the Momentum indicator line is at an oversold level it signals an upcoming bullish trend and you can consider placing a sell trade here.
Trading with trend combination indicator: You can combine the Momentum indicator with multiple trend indicators like Stochastic, RSI & more, for instance, I am going to combine it with RSI or Relative Strength Index. When both the RSI line and Momentum Indicator is at an overbought level it signals a strong bearish trend and here you can consider placing a sell trade and vice versa, When both the RSI line and Momentum Indicator are at an oversold level it signals a strong bullish trend and here you can consider placing a buy trade here.