Momentum buying and selling is exciting—however dangerous if carried out incorrect. The concept is to trap a inventory it really is “moving” and experience the wave. But timing and chance manage are everything.
Here’s a basic but effective momentum strategy:
Find excessive-extent stocks breaking key resistance.
Wait for a pullback to the breakout degree (aid).
Enter when fee suggests energy once more (inexperienced candle or higher low).
Use 5-min or 15-min charts for intraday moves. Always set tight stop-losses just under the pullback zone. Never chase inexperienced candles blindly.
Also, test relative volume (RVOL). Stocks with RVOL >2 are showing uncommon hobby—ideal for momentum trades.
Done proper, momentum trading can be one of the most worthwhile strategies. But constantly have an exit plan before you enter.