> For the complete documentation index, see [llms.txt](https://faq.midas-club.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://faq.midas-club.com/faq-en/faq-midas-down/price-momentum.md).
# Price momentum
## Price impulse designation on the chart
Price movement impulse replaces all major oscillators such as RSI, MACD, Stochastic, and visualizes much more accurately not only the direction of price movement, but also **the quality** of this wave**.**
Smoothed waves show each wave taking into account its strength and speed:
* **Wave color** shows the mood of the current wave (**green** - bullish, **red** - bearish)
* **Wave size** shows the strength of the current wave (how strong the bulls or bears are)
* **Dots** show the exact moment of a wave reversal (🟢**green** - up, 🔴**red** - down; the brighter the dot, the stronger the wave reversal signal)
* **Purple lines** show divergences (the divergence between price and impulse strength)
## Using price impulse in trading
Waves help understand the strength of bulls or bears and avoid weak, unreliable moves; for example, when a green wave is large and prolonged, it indicates bullish strength, and entering short before the wave shrinks is dangerous - the stronger the impulse, the higher the probability that the move will continue.
Dots help identify ideal moments to enter, take profit, and add to positions - look for moments when the impulse begins to change, confirming the start of a short-term trend.
**Opening a position:**
* In **a bullish trend** the optimal entry points will be 🟢**green dots** on **a green wave**, or the moment the green wave begins, when the color changes
* In **a bearish trend** the optimal entry points will be 🔴**red dots** on **a red wave**, or the moment the red wave begins, when the color changes
**Adding to positions:**
As the impulse grows actively, you can increase positions on pullbacks to maximize profit from the move - add to the position when dots of the required color appear in continuation of the trend (during a pullback, price remains in the zone of the current impulse).
**Taking profit:**
If the impulse starts to slow down as a key price level is reached, the appearance of a reversal dot is a signal to take profit.
{% hint style="success" %}
First, try the simplest [price impulse trading strategy](broken://pages/0e079cf820f867cc577b738bbebf9c43e290c49b#strategiya-impuls-ceny) from the indicator developer
{% endhint %}
{% tabs %}
{% tab title="Long trades" %}
In the example, we see how the red impulse turned into **green**...
Next, all 🟢**green dots** - these are potential long trades in continuation of the trend, or areas for adding to positions.
{% endtab %}
{% tab title="Short trades" %}
In the example, we see how the green impulse turned into **red**...
Next, all 🔴**red dots** - these are potential short trades in continuation of the trend, or areas for adding to positions.
{% endtab %}
{% tab title="Taking profit" %}
In the example of a long trade after strong upward impulses, 🔴**red dots** - these are profit-taking zones, as well as the moment when the wave color changes to **red.**
{% endtab %}
{% endtabs %}
## How to trade by price impulse
Example of trading by impulse
We use signals and **waves of price impulses:**
-when the impulse shows **green circle** 🟢 growth, we wait for the signal **BUY** and open **a long**
-when the impulse shows **red circle** 🔴 decline, we wait for the signal **SELL** and open **a short**
💡Works **ONLY** in continuation of the current trend as additional confirmation
💡In a sideways market and against the trend, signals should be ignored, as they produce a lot of noise
💡Experienced traders can enter trades earlier without waiting for the signal
---
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