The concept of momentum

Momentum is the speed of a price move: not which way price is going, but how much FORCE is behind it. The car analogy helps — a car can still be moving forward while it is slowing down because the foot has left the accelerator. Likewise, if price keeps making new highs but climbs to each one more reluctantly, the direction is still up while the momentum is fading.

Tools that measure momentum are called oscillators, because their values swing within a bounded range. They are drawn in a separate pane below the price chart, and they show not price itself but the speed of price changes. Carry one thing over from level 5: an oscillator is derived from price, so it lags — it turns after price has already turned, and reading it as a messenger running ahead of price is a misreading. In this level you will meet the two most common ones: RSI and MACD.

Let us set the limit right away: fading momentum does not mean reversal. A slowing car may stop, roll back, or accelerate again. Oscillators tell you "the force of the move is changing"; they never say "the move is ending". You will meet this distinction again and again throughout this level.