Short-Term Trading Strategies, Part 2: Momentum Trading
In This Chapter
• How momentum traders make money
• Finding entry points
• Moving with the market and news
• When to exit—the key to success
Momentum traders might be called the surfers of short-term trading—they ride the wave price movements, then bail out just before the wave crashes on the beach. Okay, the surfer metaphor is a stretch, but momentum traders do share something important with surfers: they stay with the stock until it begins to lose its momentum before exiting.
How Momentum Trading Works
The key for momentum traders is identifying a stock that is rising (or falling) on strong volume and then getting in early. But that’s only part of the success formula. The momentum ...