what is momentum trading strategy

analysts who dissect a company's financial statements or chart patterns, a momentum trader is only concerned with stocks in the news. Therefore, you must have tight stops, because it only takes one bad trade to erase profits for your last 10 trades. Trade Volume : Momentum day trader generally buys and sells a stock within the same day. Momentum tools typically appear as rate-of-change (ROC) indicators, which divide the momentum result by an earlier price.

When you review your market scanner, you should see something like the below image from the Tradingsim platform. They found that assets that performed well in one year tended to continue to perform well in the following trieved however, the concept was obscured and left dormant following the development and popularisation of value investing theory from the 1930s onward. RSI - Momentum Indicator As a momentum trader, you do not want to get caught up selling the high reading and buying the low reading. One of the greatest momentum traders is Ken Wolff. Swing Trading Earnings Reports Swing traders are not absolved from the best time discussion.