V.7:9 (307-309): Leading indicators with momentum by John Ehlers

V.7:9 (307-309): Leading indicators with momentum by John Ehlers
Item# \V07\C09\LEADING.PDF
Availability: In Stock

Product Description

Leading indicators with momentum by John Ehlers

Newcomers to technical trading are often confused by terminology. Oscillators don't oscillate and stochastics have nothing to do with random variables. Neither does momentum describe the force required to bring a moving body to rest. In the simplest case, momentum is just the difference between two time-related variables. I have found that, when combined with moving averages, momentum can produce some useful indicators.

Because momentum measures the difference of two elements in time, we can consider it a measure of the rate of change. More specifically, momentum can be considered the I equivalent of the derivative of a continuous function, the opposite of the integral in calculus. From this we can draw some interesting general conclusions about the properties of momentum, two of which hold the most interest to traders.

The first momentum property is that it detrends the time function. By taking the difference of day-to-day variations, the slower variations of the trend are greatly reduced relative to the shorter variations. As a result, trend is "filtered" out, leaving short-term tactical trading opportunities.

*Note: $2.95-$5.95 Articles are in PDF format only. No hard copy of the article(s) will be delivered. During checkout, click the "Download Now" button to immediately receive your article(s) purchase. STOCKS & COMMODITIES magazine is delivered via mail. After paying for your subscription at store.traders.com users can view the S&C Digital Edition in the subscriber's section on Traders.com.

Take Control of Your Trading.
Professional Traders' Starter Kit
All these items shown below only $299.99!
  • 5-year subscription to Technical Analysis of STOCKS & COMMODITIES, The Traders' magazine. (Shipping outside the US is extra. Washington state addresses require sales tax based on your locale.)
  • 5 year access to S&C Archive
  • 5 year access to S&C Digital Edition
  • 5-year subscription to Traders.com Advantage.
  • 5-year subscription to Working Money.
  • Free book selection.
  • Click Here to Order