V. 19:3 (30-36): Momentum And Divergence by Martin J. Pring

V. 19:3 (30-36): Momentum And Divergence by Martin J. Pring
Item# \V19\C03\028MOM.PDF
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Why Do Divergences Need To Be Confirmed By Price? Momentum And Divergence

Trading momentum requires several levels of perception. Take a look at its divergence with price. by Martin J. Pring

It is a fact that the term momentum is a generic one encompassing all oscillators. It is also a fact that there are many interpretive principles, most of which are common to all momentum series in one way or another. Divergence from price action is a key principle.

When using momentum with the overbought/oversold concept, I assumed that the price and momentum peaked and troughed more or less simultaneously. That is not often the case. Equally likely is the possibility that the oscillator will turn ahead of the price. In this instance, the momentum indicator graphically measures the acceleration or deceleration of a price move.

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