BALTIMORE (Stockpickr) -- "Momentum" is a word that's thrown about quite a bit in the financial world. To be sure, it's one of the cornerstones of technical analysis, and it's the foundation for some of the most profitable strategies in the history of the stock market. But it's also a term that many aspiring traders fail to grasp definitively. Today, we're going to take a look at precisely what momentum means, and how you can add a momentum study to your next trade.In physics, momentum is a measure of the force of an object's movement. In the trading world, that definition isn't far off. To a market technician, momentum is the acceleration of a stock's price movement, and it's one of the key determinants of a stock's behavior. It's long been observed that stocks with strong momentum in one direction or another are likely to stay in their direction (a key element of the concept of trends). If you've been in the market for a while, that probably rings a bell -- even barring any sort of news, hot stocks can continue to rally, and poor performers can continue to get shellacked. Related: Understanding Fibonacci Levels Like many elements of technical analysis, momentum has a lot to do with investor psychology. As shares of a strong performer continue to climb in price, new investors jump aboard, hoping to duplicate the performance that preceded their buying. Likewise, it's often when stocks are at their lowest that desperation sellers start to unload their positions. Without some sort of objective measures of momentum, the cards are statistically stacked against market participants during volatile conditions. But using momentum indicators, technical traders can often get a better sense of when to buy and sell. Like any other element of technical analysis, momentum indicators don't have magical predictive powers. Instead, they're a tool that traders use to guide their contingent expectations. And traders who use them properly can make some astronomical gains. In some way, momentum plays a role in the trading strategies of every successful stock, commodity, futures or forex trader I'm familiar with. So with that, let's take a look at how to use three of the most popular momentum oscillators.
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