INDICATORS

Momentum Indicators measure the rate of change in closing prices and are used to detect trend weakness and likely reversal points. They are often underrated because of their simplicity, but the importance of simple momentum in the Forex market should not be overlooked.In this lesson we will learn some extra handy tips that come in useful when using momentum indicators: momentum trading can be just as profitable as S/R trading.

Moving averages (or MAs) can be adapted to be momentum indicators as well as support/resistance markers. By plotting multiple moving averages of different time spans on our charts, we create a useful momentum indicator, the moving average crossover.This lesson outlines the two types of moving average crossovers that can be used to indicate price momentum.

New traders look for a simple system that can give them a starting point of rules to follow when looking at Moving Averages Crossovers.In this lesson we will show you an example of a simple system for generating momentum signals, and explain how it works. Note that the FX Academy does not recommend trading Moving Averages Crossovers blindly, without other supporting technical and/or fundamental indicators.