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As a trader, it is very important to use a good technical indicator that can help you find an accurate signal. One such indicator is the Momentum indicator which is proven by experts and is highly efficient. This indicator is free to use and you can even use them on the Pocket Option demo account.
What is a Momentum Indicator on Pocket Option
A Momentum indicator is a trend indicator that calculates the rate of change of a security price. you can easily use this indicator to find the possible trends & reversals plus the strength of the same. This indicator displays the past movement of an asset and how much the price of an asset has changed over a specific period, usually 10 periods, and compares it to the asset’s price over a period of time.
How to insert Momentum Indicator on Pocket Option
In order, to insert the Momentum Indicator on Pocket Option follow the steps given below.
Step 2: Once, you have logged in. choose the desired asset you want to trade and make sure to set the default chart to candlestick.
Step 3: Click on the indicator button from the top of the page. now, search and click the Momentum Indicator name from the menu.
Step 4: Lastly, You can change the indicator period if you going to trade with a short-period time zone.
Unfold Momentum Indicator
When you unfold the indicator you will see that the indicator uses a histogram line that oscillates around a zero line in the form of green histogram lines. when you notice the green histogram lines above line zero it signals a bullish trend and similarly, when you see the green histogram lines below the zero line it signals a bearish trend.
How to trade with Momentum Indicator on Pocket Option?
There are multiple ways of trading with the Momentum Indicator. However, the best way to trade with the Momentum Indicator is by combing the indicator with other trend indicators like Moving averages & more. In this article, I am going to combine the Momentum Indicator with Parabolic SAR which will help you find high-quality signals.
In, order to use the combinations of the two indicators. you first, need to need to add the Parabolic SAR to the chart. use the same above method click on the indicator button and find and click Parabolic SAR from the list.
Signals to place buy trade
- When the histogram lines are above zero. It signals a bullish trend.
- Plus, when the Parabolic SAR dots are below the price. It confirms a strong bullish trend and here, you can place a buy trade accordingly.
Signals to place buy trade
- When the histogram lines are below line zero. It signals a bearish trend.
- Plus, when the Parabolic SAR dots are above the price. It confirms a strong bearish trend and here, you can place a sell trade accordingly.
In case you don’t know,
Parabolic SAR ( Parabolic Stop and Reverse ) is a technical analysis tool that was developed by J. Welles Wilder Jr. This indicator is most widely used by traders to identify upcoming trends and reversals. This indicator uses a series of dots that revolves around the price up or down. when the indicator dots are above the price it signals an upcoming bullish trend and conversely, when the indicator dots are below the price it signals an upcoming bearish trend.
I wish you the very best of luck 😉