Momentum Index as the Difference Between Current and Prior Close

Summary

This note defines the Momentum Index, abbreviated Mtm, as the current closing price minus the closing price a specified number of days earlier. The lookback interval is a parameter, so the resulting value depends on the chosen period. The measure expresses price change in absolute terms rather than as a percentage return.

The document identifies the required inputs and gives the calculation rule, but its referenced explanation is not included in the text. It offers no thresholds, signal interpretation, market examples, backtest, or evidence that any particular setting is effective. Traders would need to choose a lookback and develop and validate their own interpretation before using the measure in a strategy.

Key ideas

• The Momentum Index compares the latest close with a close from a selected number of days earlier.
• Its value is an absolute price difference, not a percentage return.
• The document specifies the input and calculation but does not supply trading rules or performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.