Article The Elements of a Perfect Momentum Trade

T2W Bot

Staff member
1,475 71
A momentum strategy seeks to profit from buying high and selling higher on the long side while selling low and covering lower on the short side. Most traders fail in this enterprise because they haven’t mastered the five elements of a perfect momentum trade. Once in place, the profit and loss statement can improve dramatically, adding significant capital to the bottom line.
Trading momentum markets require sophisticated risk management rules to address volatility, over-crowding and hidden traps that steal profits. Market players routinely ignore these rules, blinded by an overwhelming fear they’ll miss the rally or sell-off while everyone else books windfall profits. The rules can be broken down into five elements: selection, risk, entry, management and exit.
Proper Security Selection Choose liquid securities when engaging in momentum strategies. Stay away from leveraged or inverse ETFs because their price swings don’t accurately track underlying indices or futures markets...

Continue reading...
Last edited by a moderator:
AdBlock Detected

We get it, advertisements are annoying!

But it's thanks to our sponsors that access to Trade2Win remains free for all. By viewing our ads you help us pay our bills, so please support the site and disable your AdBlocker.

I've Disabled AdBlock