We calculate the momentum percentage which measures the percentage change of the closing price with the price n periods before.
A double argument which represents the momentum percentage.
The closing (or current) price divided by the price from n periods previous and then
multiplied to 100, to give the percentage where 1 percent = 1, of the change of the present
price with the price n periods beforehand. This indicator will oscillate around the long term trend
rate of the given asset is questions. That is, if the asset is mean reverting then the indicators
will oscillate around 100, over the log term. However, if the market has a long term up trend such
as the SP500, then the indicators will oscillator around a value higher than 100 + X,
where X is the long term trend rate of the market in question.
The application of the indicator to identify a trend is very straight forward. When the values of
the indicator are less then 100, it indicates a down trend and when the values are
above 100, it indicate an up trend.
| Exception Type | Condition |
|---|---|
| ArgumentException | Thrown if either parameter is strictly negative. |
Momentum Class | WebCab.COM.Finance.Trading.Indicators Namespace