Momentum Indicator
December 8, 2021
What is Momentum?
December 8, 2021

Momentum Trading

There is a trading technique momentum – style trading, when traders focus on stocks, the price of which are dynamically moving in one direction.

The essence of the style is to assess the behavior of shares relative to the behavior of the market. To do this, traders evaluate whether the shares are moving with or against the market, whether they have enough volume, and how they behave in comparison with the initial forecast.

The strategy is based on short-term changes in share prices, not on their fundamental value. When choosing a moment to buy or sell, pay attention to the strength of trends that have formed on the asset.

If the value of the asset is actively growing, then an uptrend has formed and it is possible to place up trades.

On a downtrend, when the price is dynamically going down — place down trades.

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