- Next, you subtract the number of periods since that stock hit its highest high.

- Then, you divide that by the number of periods again.

- And finally, you multiply that answer by 100.

While that may seem like a mouthful, it is important for you to at least understand the big picture.

So two spots are marked "Number of Periods."

That's simply the adjustable window of time the formula uses to determine the strength of both momentum and gravity. To keep things simple, let's use 100 - meaning 100 days.

We're looking to find the right time frame to base a specific trade on.

Now, I've highlighted part of this formula labeled "Number of Periods Since Highest High."

What this represents is the number of days that have passed since this stock's share price reached its 100-day high point for the green momentum line.

Now, for the red line, it's the same formula - you are just calculating the number of days since this same stock's share price reached its 100-day lowest low point.

What this represents is the number of days that have passed since this stock's share price reached its 100-day high point for the green momentum line.

Now, for the red line, it's the same formula - you are just calculating the number of days since this same stock's share price reached its 100-day lowest low point.