TradersPro uses momentum to determine buy, hold and sell signals. A stock will enter the buy zone at +70 on the momentum scale.
A stock may still have a buy signal (uptrend) but it may be extreme in that uptrend. That ranges from a +140 to +250 (or higher) and creates short term reversal risk on a stock. Not that the stock will reverse, but that it may pull back into the buy zone to create a more ideal buy point.
Stocks that may be shifting to a downtrend move into the sell zone at -70 and move to extreme at -140 to -250. A stock that is in the bearish extreme zone has moved too far too fast and is due for a bounce.
The momentum indicator shows the current trend of a stock. It also correlates to the trend color on charts. The buy zone is shown in green on the indicator for trend following stocks. Trades can be established when the stocks momentum has entered the buy zone. Stocks that have extreme momentum will often pull back to the buy zone during a strong uptrend, allowing a more ideal entry.