Intraday momentum trading strategy

We have explained intraday momentum trading strategy in details. Momentum investing is a trading strategy in which investor buy a security that is rising and sells them look to have peaked. The goal is to work with volatility by finding buying opportunities in the short-term uptrend. We sell them when the security starts losing momentum. Momentum investing seems like an investing strategy and like a knee-jerk reaction to market information. The idea of selling losers and buying winners is seductive but fly in the face of the tried. The investors buy securities that are rising and sell them when they go to the peak. They take cash and look for the next short-term uptrend and repeat the process.

Momentum Trading using Forex Momentum Indicator : Trading Strategy Guide believes that smart trading is the way to build a momentum trading strategy. We don’t predict when the momentum will happen, but we let the market tips his hands and then react. The buy high to go higher and sell low to go lower is the first principle. Trading is in the direction of the trend with momentum on our side.

Place Protective Stop Loss below the Recent Higher Low

We hide our protective stop loss. This is below the higher low level formed before the best momentum trading strategy issue. It can trail your stop loss below each recent higher low. The strategy allows you to lock-in the potential profits in case of a sudden market reversal.

Take Profit as we break below the Previous Higher Low : The trend in motion can stay in that state long that can anticipate. We want to maximize our potential profit that let the market tip its hand before liquidating our trades. It breaks below the recent higher low. Then take profit when the best forex momentum indicator breaks below the -50 level.

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Precepts of Momentum Investing

Momentum investing has the advantage of market volatility by taking short-term positions in stocks going up and selling them. Investor moves the capital towards new positions. The market volatility like waves in the ocean and a momentum investor is sailing up the crest of one only to jump to the next wave before the first wave crash down.


Elements of Momentum Investing

Trading momentum markets requires a sophisticated risk management rule to address volatility, overcrowding, and hidden traps that reduce profits. The market players ignore these rule blinded by an overwhelming fear which misses the rally while everyone else books windfall profits.


Benefits of Momentum Investing

Momentum investing can get profits for the trader who has the right personality that handles the risks involved. It can dedicate them to sticking to the strategy.
Potential for High Profits Over a Short Period:-There is lucrative profits made from momentum investing.


Leveraging the Market's Volatility

Momentum investing is able to capitalize on volatile market trends. Momentum investors look for the stock to invest in that are on their way up and then sell them before the prices start to go back down.


Leveraging the Emotional Decisions of Other Investors

The momentum investors do this in a systematic way that includes buying points and selling points. It can be controlled by emotional responses to stock prices like momentum investors seek to take advantage of the changes in stock prices caused by emotional investors.


Drawbacks

For every silver-lined cloud, there is rain. Momentum investing has several downsides. The same risk-return tradeoff exists with other investing strategies. This plays a hand in momentum investing.


Working

Momentum investing works but it may not be practical for all investors. Individual investor's practice leads to overall portfolio loss. When you purchase a rising stock a falling stock you will be reacting to older news than the professionals at the head of the momentum investing funds. They will get out and leave you and unlucky folks holding the bag. If you do manage to time it right you will still be more conscious of the fees from turnover.


Momentum Day Trading Strategies

Bull Flags :Using Bull Flag Pattern we can enter the first candle to make a new high after the breakout. We scan for the stocks squeezing up, forming the tall green candles of the Bull Flag, then wait for 2-3 red candles to form a pullback. The first green candle makes a new high after the pullback is entered, with my stop at the low of the pullback. We will see a volume spike at the moment the first candle that makes a new high.


Flat Top Breakout :

The flat-top breakout pattern is similar to the bull flag pattern except the pullback has the same name implies, a flat top. Here there is a strong level of resistance. It happens over a period of a few candles and easy to recognize on a chart by the obvious flat top pattern. The pattern forms because there is a big seller at a specific price level that requires buyers to buy up all the shares before prices go higher.
Momentum in finance is based on factors as Volume, Volatility, and Time frame
Momentum indicators:-RSI, Moving averages, and the stochastic oscillator


Conclusion

Momentum trading is the practice of buying and selling asset according to the recent strength of price trends It will open a position to take advantage of an expected price change and close the position when the trend starts to lose its strength Momentum trading is totally based on volume, volatility and time frames It works by enabling traders to identify the rate of change in asset price/volume. The volume will continue in one direction indefinitely as momentum is thought of as an oscillating measure momentum traders focus on price action than long-term growth and fundamentals.


© 2020 All rights reserved My blogs (Posts) and videos is only educational purpose on stock market and depend on my self research and analysis. I can't advice to buy/sell any stock. because I'm not SEBI registered.If someone wants to inter the stock market, then my advice is first learn from an authorize institution or take advice from your authorized adviser.
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