Because trends are made of a number of price swings, momentum plays an important role is assessing trend strength. Therefore, it is very important know when a trend is scaling down. Less momentum does not always create a reversal, but it does signal that something has been evolving, understanding that the trend may consolidate or reverse.
Price momentum means the direction and magnitude of price. Comparing price swings helps traders gain understanding of price momentum. FX5 MACD Divergence V1.0 we’ll check out the best way to evaluate price momentum and show you what divergence in momentum can let you know about the direction of the trend.