Trading strategies

Momentum

Momentum refers to the strength and speed of a price move: a stock "with momentum" moves strongly in one direction.

Momentum traders look to ride a move that is already underway, backed by volume, and to exit before it fades. The key is not to arrive too late, when the move is about to reverse.

Example

A stock jumps 15% on huge volume after news: momentum traders jump on it.

Related terms

Ready to put it into practice?

Understanding a term is good. Applying it on a real platform with a clear method is better. That is exactly what we do in 5 days.

← All terms