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Momentum strategy


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Momentum Trading basic explanation.
How to invest in stocks using momentum trading strategy and how to limit risks in investing in the stock market.

Published in: Business, Economy & Finance
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Momentum strategy

  1. 1. Momentum TradingWhat is it?
  2. 2. What is Momentum Trading?  Trade stocks that are moving significantly in one direction on high volume  Jump on board to ride the momentum train to a desired profit  Just like riding a wave
  3. 3. How to find momentum stocks?  Ride day trading “hot stocks” before they fall off  or  Ride funds during 30 days durations
  4. 4. Pitfalls of Momentum Trading  Jumping into a position too soon, before a momentum move is confirmed.  Closing the position too late, after saturation has been reached.  Failing to keep eyes, missing changing trends, reversals or signs of news that take the market by surprise.  Keeping a position open overnight. Stocks are particularly susceptible to external factors occurring after the close of that days trading - these factors could cause radically different prices and patterns the next day.  Failing to act quickly to close a Pitfalls of Momentum Trading  bad position, thereby riding the momentum train the wrong way down the tracks
  5. 5. Win with Momentum Trading Strategy  Create automated algorithm, taking the emotion out  Rolling momentum moves, always riding the last wave  Base it in index funds, not individual stocks