So, we are now beginning next episode of our channel analyzes and I want to talk about oscillators and oscillators are statistical statistical indicators for our chart analyzes and in this lecture we want to talk about the momentum and related strange index or short RSI. So, let us talk firstly about the momentum. The momentum means in the chart analyzes a whole much power is in the actual trait and just want to simplify that We are in the DAX chart here and go on indicators and click on momentum there it is. So, you can also just here adjust the length let's say 15 days. So, this is the momentum line. And so what means the momentum the momentum means how strong a trend is, so, how powerful and the same way how much money is in the market?

Because if we have a strong momentum there are many people who actually buy and this is normally the way how stocks or share price index prices however, how prices rise up and what you can see is that we have the momentum line here. And if you know look, it moves like the chart okay in wave in wave formations. And what you also can see if you look on the chart and on the momentum on the on the same day on the same time is that the momentum is a little bit next to the chart. So, it shows a little bit later, what happens and so, why is it like this, the momentum is the power, the power in the trend and to two year contract Figure out how, how powerful the trend is, the trend must appear. So there is the point where the momentum falling down here, but if we look, there we have the four first red candles, so negative candles, shorting the course.

And then you have the point where here the momentum falling down fine. And so to this point okay, if you see this, the latest red candle, this one here is at a point in the momentum where the momentum raise up again. So, there's more power now in the market and we see very much power here. And the prizes raised up again and this one and is the interesting thing because oscillators are statistical and not directly. So we have here on this point we have the highest momentum and the whole timezone which we can see here. This is the highest point.

But however, this is the highest point on a momentum and on a chart here but the price is much more higher yet, but there's not so much power in the chart from now. Okay. And you can see this also we have three very high points in the momentum but there are not in the chart, not the time. Where did the chart as the highest okay. So, just for the declaration the momentum is a related statistical number to figure out how powerful the trend is, and for for the rules the mentum just got simply rules in every time we have those high points there or the lowest points if the trend goes in the other direction after those points here and here and also here, they are the points where we should go into the market. So, open a long position or short position.

What just means is we have high point and get lower and lower. That's our signal to go short. On the other hand, if we have this one and we see Qaeda momentum raise up again that's all point where we should go long position and we will see the strategy. Now, box First thing first errors I and I want to show you this with indicator mentum together. So RSI there it is and what is the red light of strength index? That means to set up the strange of the of the earnings of the profit in relation to earlier ones So, as you can see, this purple range here is the average average earnings or losers here you can see there's also the line and if the line goes higher or under the average line we have higher profit or lower profit.

So, this oscillator calculating the regulative strength of earnings for every time period. And what you can also see, because there are both statistical and both oscillators, which nearly nearly the same meaning you can see that to the Lines goes quite in the same level. Okay? So However, because of that they're only statistical key figures. You shouldn't only use one of these strategies, because it's just statistical. There are there are some traders there are really good with them.

And yeah, I'm a lot on the using this strategy. But however, we will test this now. So I delete both. We go back on indicators and look for momentum and there is the momentum strategy. And I only told you about a strategy testing tool from from trading view. It's Really nice.

So what does it do here? The strategy testing tool testing the strategy on all the time period and say, okay, that would be your profit, and so on. So the net profit is here 8700. So 875 percent means that they, the strategy test that thing on 100 thousands that we're using 100,000 and we have in total 655 closed trades. So, the whole time period 655 trades, but there are just just 35 of them would be profitable, and the profit factor would be only one or two. So the average trade would be 13 euro and there are okay.

It's an average an average 18 bars in a trade. Yeah. So that's it. What you can see down here is the blue are the profitable ones and the red are the negative. And but there is no time index. So let's see here, the gross loss would be 32,000 and Ross profit would be 40,000.

So depends on you if this would be a strategy for you, and how does it work is it up here? The blue ones mean to buy and the red ones to sell to that means to contract two contracts and Yeah, what you see is that this one here would be very good in the historical data would be very nice straight into short here and go back into market here ever sell bye bye bye and yeah, that would be the point okay, here this is you sell there and buy again one ball later, but that would be also good trade up there. So as you see there are really a lot of trades from the momentum strategy, but however, the average return is not that good. So it depends on you if the strategy might be something for you. And in our module strategy testing, we will compare Some oscillators, strategies and some other strategies together to making real strategy from it.

So this will be very interesting. And yeah, that's for now for the oscillators sort of statistical, key figures indicators that we are using in the chart analytics. And you will see us in our next video