Momentum is the raw price difference between the current close and the close N bars ago. Sign tells direction, magnitude tells how much distance the market has covered.
Formula
momentum = close[t] - close[t-N]Params
period- lookback in bars. Required.
Output
Single column named after your indicator (e.g. 10-bar momentum).
Usage
Same patterns as ROC: momentum filter, mean reversion on extremes, regime tagging via custom threshold.
Momentum vs ROC
Momentum is absolute (a $300 move on BTC at 60k vs a $300 move on BTC at 20k look identical to Momentum). ROC is relative (those two moves are 0.5% and 1.5%). For cross-symbol or cross-regime work, prefer ROC.
Pitfalls
Momentum thresholds are not portable across price levels. A
momentum > 500 threshold on BTC that was valid at $20k stops
firing at $60k because the same percentage move is now momentum > 1500. Always normalize against symbol price or volatility before
hardcoding a threshold.