What it means
Momentum is a way of describing how strongly and quickly price has been moving. If price is rising quickly, upward momentum may be strong. If price is falling quickly, downward momentum may be strong.
Why it matters in live markets
Momentum helps traders understand the pace of market movement. Indicators such as RSI are often used to organise momentum information, but momentum does not guarantee what price will do next.
Key points
- Momentum describes the strength and speed of price movement.
- Momentum can rise, fall, strengthen, weaken, or become mixed.
- RSI is one tool used to observe momentum.
- Momentum can remain strong during trends.
- Momentum is context, not a forecast.
Example
If a market rises quickly over several sessions, traders may describe the market as having strong upward momentum.
Related glossary terms
Relative Strength Index, Oscillator, Trend, Volatility, Divergence
Where you will see it
You will usually see momentum discussed in technical analysis, RSI education, trend analysis, market recaps, and volatility commentary.