Understanding amp Trading Momentum

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Momentum trading is a strategy in which you open trades only in the direction of strong price trends, capitalizing on the continuous price action and exiting before a reversal. • Momentum traders do not necessarily concern themselves with where a trend ends and begins but instead focuses on opportunities from the main body of the trend. In this mindset, traders may “buy high and sell higher.” • While momentum trading follows short-term trends, it should not be confused with trend trading, which refers to longer-term trades. Trend trading, or trend following, applies to macro asset classes only and ignores the short-term fundamentals many momentum traders watch closely. • Momentum trading works if you believe in sustained market trends. A quick glance across a few charts usually reveals that they exist – upward price swings can last several days or weeks, and a short squeeze can draw on for an even longer period. • However, there are no guarantees that the trend will continue. Trading momentum leaves you at risk of reversals and price corrections. The strategy requires close attention to your trades, as a stalled price can cause selloffs that quickly snowball. • Please subscribe and comment ‪@InvestorsTradingAcademy‬

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