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Momentum Range Analysis

by TradingDrills Academy

In this lesson of Module 4, Workshop 10, we will discuss the concept of Momentum and Momentum Range Analysis.


Momentum refers to the Rate of Change in a Security’s Price. We use momentum to analyze the Strength and Weakness of the “Trend” Pattern Therefore, in Sideways patterns, the momentum analysis is not applicable and only used when the dynamic channel shows “Trending” Patterns.

 We Simplified our price action Momentum Analysis and use 2 methods of Range analysis and Slope analysis.

price breaks

In Sideways patterns, the momentum analysis is not applicable and only used when the dynamic channel shows “Trending” Patterns.

We use both methods and show you how to use Momentum Range Analysis to analyze the Strength and Weakness of “Trend” Patterns.

In the Momentum Range Analysis of an established uptrend, Compare the last two Upward Range Lines. 

No change in Range means the strength of the trend is constant.
Again Compare the last two Upward Range Lines. An expansion of the Range means the strength of the trend is increasing.
Again Compare the last two Upward Range Lines. A contraction of the Range means the strength of the trend is decreasing.

Sideways pattern
price breaks the dynamic resistance

In the Momentum Range Analysis of an established downtrend, Compare the last two downward Range Lines. 

No change in Range means the strength of the trend is constant. Again Compare the last two downward Range Lines. 
An expansion of the Range means the strength of the trend is increasing.
Again Compare the last two downward Range Lines. A contraction of the Range means the strength of the trend is decreasing.

In this lesson of Module 4, Workshop 10, we will discuss the application of Momentum Range Analysis.


Downtrend pattern

In Price action Algo Trading, we mainly use the trend-following setup, which provides a high win rate, and will be discussed in modules 5-11 in detail.

So you have to recognize and only trade the trending patterns and not sideways patterns.

As you have seen in the previous module, the interconversion of sideways to trend and vise versa is a gradual phenomenon and many traders miss recognizing these smooth transitions in real-time.

By using the momentum to analyze the Strength and Weakness of the “Trend”, you can get an early indication of when a trend is forming and when it is at the late stage and lost its momentum.


When analysis of momentum indicates that the trend is weakened, you should not take any new position and be prepared to close all open positions.

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